Sobha Targeted to Reach Rs 1840: Choice Institutional Equities

Sobha Ltd Posts Strong Performance, Boosts Revenue and Profit

Sobha Ltd, a leading real estate developer, has delivered a robust performance in the recent quarter, driven by the timely completion of 1.76 million square feet (msf) of projects. This significant milestone has led to a notable increase in revenue, profit, and margin for the company. With a solid launch pipeline and a strengthened balance sheet, the management remains optimistic about sustaining pre-sales and collection in the coming quarters.

The company's robust pipeline in FY26 and FY27E is expected to drive pre-sales growth, with the management aiming to achieve 15-20% year-over-year (YoY) growth in pre-sales in FY27E. This growth is building on the company's record pre-sales of INR 81.36 billion achieved in FY26. In FY26, SOBHA launched 9 projects covering approximately 6.04 msf in 6 cities.

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The company expects to generate net cash flows of INR 95.6 billion from its ongoing and completed projects over the next 4-5 years. Additionally, its future projects of 20.67 msf are forecasted to yield pre-sales of INR 271.65 billion.

Maintaining 'BUY' Rating

Choice Institutional Equities has maintained its 'BUY' rating on SOBHA with a target price (TP) of INR 1,840 per share (unchanged). The rating is based on the company's residential business with a strong pipeline, growth trajectory in the commercial segment, stable contract and manufacturing business, as well as its land bank.