Mar'25 View on Sobha Ltd

Sobha Limited, incorporated in 1995, is a real estate developer engaged in construction to operations of townships, housing projects, commercial premises, and other related activities. The Co. is also engaged in manufacturing activities related to interiors, glazing and metal works, and concrete products. After making a high near 2100 and then touching low of 1,100, the stock is consolidating at 1,200 levels and looks scale past its 200EMA level near 1,500 due taking into account positive data points. • Reported a healthy Q3FY25 revenue of Rs1224.1 cr (+79% yoy, +31% qoq). • Sobha expects positive cash flows of Rs10000cr from ongoing and completed projects. • Sobha reported weak Q3FY25 pre-sales of ~Rs1390cr (-29% yoy) on a high base. • Sobha has received approvals for a large project in Bengaluru (37 lakh sq. ft). • It is also looking to broaden its presence with launches in Noida, Mumbai & Hosur. • Valuations at 7.6X EV/EBITDA (FY26E) are inexpensive, and the balance sheet is strong post the rights issue. • Recent price correction & improved prospects (of 2.1cr sqft), makes us constructive.