Aiming for higher scale with strong balance sheet

Company
04 Jan 2024
5 Min read 
  • Real estate company Sobha is aiming for higher scale with a strong balance sheet.
  •  They are targeting sustainable growth with healthy cash flows and profitability.
  •  After underperforming its peers in pre-sales growth, Sobha is set to outperform with its focus on unlocking its land reserve and exploring external growth opportunities.
  •  The monetization of large land parcels in Bengaluru will lead to a re-rating in its land valuation.
  •  Sobha is our top idea for CY24 with a revised target price of INR1,400, implying a 25% upside potential.
  •  Key risks include a slowdown in residential absorption, delays in monetization of land parcels, and inability to sign business development deals.
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