Sobha Ltd. share price target

Maintain BUY with an increased NAV of Rs 641/share. Sobha Developers (SDL) 4QFY18 net profit came in at Rs 0.7bn vs. our estimate of Rs 0.4bn. SDL recorded a healthy 1.02mn sqft of pre-sales for 4QFY18. Pre-sales value (SDLs share) was Rs 6.6bn, which is 30% higher YoY.

ICICI Securities Ltd | Retail Equity Research Sobha's topline grew robustly by 31.8% YoY to | 769.6 crore (our estimate: | 704.4 crore) led by 34.7% YoY growth in revenues from real estate division to | 501.3 crore (our estimate: | 391.9 crore)....

Steady operations; 8msf launch planned in FY19 Sobha 4Q profit was +42% YoY, on higher revenue recognition during the quarter. Revenue recognition increased by 35% YoY while contractual revenues improved by 24%. Sobha reported fresh sales at INR6.6bn, +7/30% QoQ/YoY respectively, as sales witnessed improvement across Sobha reported fresh sales at INR6.6bn, +7/30% QoQ/YoY respectively, as sales witnessed improvement across regions. Bangalore reported improvement in sequential volume primarily contributed by Dream Acres and launches in last 2 quarters. The company launched 2 (0.63msf) projects during the quarter in Bangalore and Chennai. Net...

Q3FY18 PAT grew by 35% YoY led by strong top-line growth and margin expansion in realty segment. Sales volume stood at 0.9msf (up 52% QoQ) owing to higher volumes from Bangalore. EBITDA margins improved by 220bps YoY to 19.9%. Improving launch pipeline, gain in market share and reducing dependence on Bengaluru market are key positives....

With recent price correction we Upgrade SDL to BUY from NEU with NAV of Rs 632/share. Adjusted for MAT credit of Rs 39mn, Sobha Developers (SDL) 3QFY18 net profit came in at Rs 495mn vs our estimate of Rs 493mn. SDL recorded 0.93mn sqft of pre-sales for 3QFY18. Pre-sales value stood at Rs 7.51bn (SDL share Rs 6.11bn), which is +92% YoY against the demonit affected 3QFY17. Cost of funds reduced to 9.74% vs 9.88% QoQ.

ICICI Securities Ltd | Retail Equity Research Sobha's topline grew robustly by 28% YoY to | 691.9 crore (our estimate: | 606.8 crore) led by 50.8% YoY growth in revenues from real estate division to | 500.7 crore (our estimate: | 391.9 crore). However, its contractual revenues de-grew 10.2% YoY to | 191.2 crore (our estimate: | 214.8 crore)...

Sobha's topline grew 19.5% YoY to | 646.6 crore led by 35.7% YoY growth in real estate revenues to | 493.1 crore. However, its contractual division revenues de-grew 13.6% YoY to | 153.5 crore The EBITDA margin expanded 20 bps YoY to 19.3% Net profit grew robustly by 31.0% YoY to | 50.3 crore led by strong topline growth and EBITDA margin expansion Sobha's sales volumes grew strongly at 5.6% QoQ to 8.61 lsf with sales value of | 592.7 crore. The Bengaluru market remained strong...

Maintain BUY with an increased NAV of Rs 572/share Sobha Developers (SDL) 2QFY18 net profit came in at Rs 503mn. Adjusted for MAT credit of Rs 103mn, PAT is Rs 400mn, in-line with our estimate of Rs 432mn. SDL recorded 0.86mn sq ft of pre-sales for 2QFY18, with pre-sales value at Rs 7.8bn (SDL share Rs 5.9bn). Cost of funds reduced to 9.88% QoQ.

Sobhas management expects the improved performance of Q1FY18 (pre-sales of Rs 5.6 bn; up 20% YoY) to continue for FY18. It highlighted improved footfalls and conversion. Further, it expects the collection run-rate (Rs 7.3 bn in Q1 the highest in past 13 quarters) to be sustainable.

Maintain BUY with a NAV of Rs 500/share. Sobha Developers (SDL) 1QFY18 net profit came in 40.3% ahead of estimates. This was owing to robust revenue recognition in the real estate segment, with 74.5% contribution (+20.9% YoY growth). Led by multi-quarter high collections of Rs 7.3bn, gross/net debt reduced Rs 760/490mn QoQ to Rs 21.6/20.2bn (0.75x net D/E). With a ramp up in APMCs project capex (during FY19E), debt may inch up, though net D/E remained stable and will max out at 0.9x.