ICICI Securities Bets On This Small Cap Real Estate Stock, Recommends Buy For 37% Potential Upside

ICICI Direct maintains its positive outlook on Sobha Ltd with a buy call. It has assigned a target price of Rs 808/share to the stock of the company for gains of 37% in 12 months. Sobha Ltd. is a small cap Real Estate sector company with a market capitalisation of Rs 5,624.36 crore.

Stock Outlook & Returns

The current market price (CMP) of the stock is Rs 592.60/share on NSE. It was opened at Rs 600/share, currently trading 1.29% up from its previous close of Rs 585.05/share. Its 52 week low was recorded on 20 June 2022 at Rs 480.20/share and the 52 week high on 17 January 2022 at Rs 1,044.95/share, respectively.

The shares surged 0.99% in the last 1 week, however, it has fallen 3.91% in the last 1 month. The stock has fallen 30.46% in the last 1 year and 2.19% in the last 5 years, respectively. It has given 46.87% positive returns in the last 3 years.

 

Gurugram market drives sales bookings, Buy for a target price of Rs 808/share

Sobha Ltd. (SOBHA) achieved Q3FY23 gross sales bookings of 1.47msf worth Rs14.2bn vs. Isec estimate of Rs12.0bn and is the best ever quarter for the company in value terms for sales bookings. The Gurugram market which saw release of new inventory of 0.7msf was the key driver with volumes of 0.35msf and accounted for 24% of the quarter's sales volumes. While the strong start to H1FY23 had led to the company revising its FY23 guidance to 10-15% YoY volume growth and 15-20% YoY value growth, given the strong 9MFY23 performance with gross sales bookings worth Rs37.3bn (up 35% YoY), we believe that the company is well on track to achieve its FY23 guidance and we maintain our FY23E and FY24E gross sales booking value estimates of Rs51.0bn and Rs55.4bn, respectively. We maintain our BUY rating with an unchanged SOTP based TP of Rs808/share. Key risks are slowdown in residential demand and a rise in the company's debt levels.

 

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.