Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us  

| More

Sobha Ltd - H2FY21 to see better sales traction - ICICI Securities

Posted On: 2020-11-17 03:02:44 (Time Zone: Arizona, USA)

Sobha Ltd's Q2FY21 gross sales volumes of 0.89msf worth Rs6.9bn were down 14% YoY in volume terms, but up 1% YoY in value terms. As per the company, enquiry levels and sales bookings in October 2020 were above pre-Covid levels and it is now targeting YoY growth in H2FY21 sales bookings on the back of improved demand in ongoing projects and a strong launch pipeline in Bengaluru/Chennai. We retain our FY21/22E gross sales bookings estimates of Rs24.1/Rs28.3bn, respectively, which builds in flattish sales booking value in H2FY21E. We retain our BUY rating with a revised SoTP-based target price of Rs382/share (earlier: Rs288) as we now value the company's land bank at 25% discount to market value (earlier 50% discount) owing to improved demand visibility. Ability to keep debt levels in check remains the key monitorable.

- Q2FY21 sales bookings encouraging in a tough quarter: Sobha's Q2FY21 gross sales bookings of 0.89msf worth Rs6.9bn were down 14% YoY in volume terms, but up 1% YoY in value terms. On QoQ basis, gross sales volumes and value were up 37% and 41%, respectively, and as per the company, enquiry levels and sales bookings in October 2020 are above pre-Covid levels. Incremental sales in Q2FY21 were driven by premium segment Marine Drive project in Kochi, which clocked sales of 0.13msf during the quarter vs usual quarterly run-rate of 0.04msf. We believe the numbers are encouraging considering July 2020 saw a lockdown in Bengaluru, which impacted sales along with no new project launches during the quarter. Sobha's Q2FY21 real estate collections improved 50% QoQ to Rs5.0bn (86% of Q2FY20 levels) and with faster pace of construction expected in H2FY21, incremental collections are likely to trend back to pre-Covid levels by Q4FY21.

- Expect improved showing in H2FY21: The exit run-rate for monthly sales volumes in August-September 2020 would be 0.30-0.35msf, which is almost 90-100% of pre-Covid monthly run rate. Sobha's management has indicated that it is now targeting YoY growth in H2FY21 sales bookings on the back of improved demand in ongoing projects and a strong launch pipeline in Bengaluru/Chennai of 4-5msf. While the company remains optimistic about its upcoming launch pipeline of 14.5msf, the timing and area launched for sale remains dependent on the Covid-19 containment in India and project approvals in H2FY21E, especially in Bengaluru.

- Debt levels remain key: In Q2FY21, Sobha generated positive operating surplus of Rs1.3bn, which was negated by interest/tax/capex and dividend payment of Rs1.5bn leading to net debt rising by Rs0.2bn QoQ to Rs30.5bn (net D/E of 1.3x). The company's ability to keep debt levels in check remains a key monitorable.

Shares of Sobha Limited was last trading in BSE at Rs.299 as compared to the previous close of Rs. 296.2. The total number of shares traded during the day was 3069 in over 203 trades.

The stock hit an intraday high of Rs. 299.65 and intraday low of 296. The net turnover during the day was Rs. 916706.

Source: Equity Bulls

Click here to send ur comments or to

Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only., its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.

Other Headlines:

4th Industrial Conclave - Bullish undertone, favourable valuation - HDFC Securities

Sanofi India - Weak quarter; sequential improvement - ICICI Securities

Sunteck Realty - All eyes on upcoming launches - ICICI Securities

Company Update - Tata Motors - ICICI Direct

Q4CY20 Company Update - Mahindra CIE Automotive - ICICI Direct

Event Update - Hindalco - ICICI Direct

EY report launch at BioAsia 2021 - Moving the needle: Healthcare industry in a post-COVID world

Initiating Coverage - Dalmia Bharat Ltd - HDFC Securities Retail Research Desk

Initiating Coverage - Mastek Ltd - HDFC Securities Retail Research Desk

Hindalco Industries - Status quo maintained - ICICI Securities

Tata Motors - India business scaling in the right direction - ICICI Securities

IPO Review - Heranba Industries Ltd

Company Update - Narayana Hrudayalaya - ICICI Direct

Ambuja Cements - Market share sustenance key for rerating - ICICI Securities

ADD on Astral Poly Technik - An 'astr'onomical growth story - HDFC Securities

FMCG Sector Update Report - Divergence narrows; refocus on core - HDFC Securities

Maintain REDUCE on Jubilant FoodWorks - More legs for growth; reflecting confidence on core - HDFC Securities

Torrent Power - Growth acceleration - ICICI Securities

Mahindra CIE Automotive - CY20 performance closes on a strong note - ICICI Securities

Q3FY21 Company Update - V-Guard Industries - ICICI Direct

Quant Pick - Indus Towers - ICICI Direct

Q4CY20 Result Update - Ambuja Cement - ICICI Direct

Q3FY21 Company Update - Nesco Ltd - ICICI Direct

Maintain BUY on Ambuja Cements - Healthy quarter; multiple triggers ahead - HDFC Securities

Heranba Industries Ltd. - IPO - Sound Financials & Promising Outlook Augur Well

India Equity Strategy Report - Quarterly flipbook: Q3 - upgrades galore! - HDFC Securities

Earnings Wrap Q3FY21: Encouraging quarter, broad based recovery under way!

Shilpa Medicare - USFDA import alert at Jadcherla unit - ICICI Securities

Q3FY21 Company Update - Indian Bank - ICICI Direct

Quant Pick - Torrent Power - ICICI Direct

GE T&D India - Strong cashflow - ICICI Securities

Q3FY21 Result Update - Graphite India - ICICI Direct

Q4CY2020 Result Update - Varun Beverages - ICICI Direct

Q3FY21 Company Update - NBCC Ltd - ICICI Direct

Quant Pick - United Breweries - ICICI Direct

Q4CY2020 Result Update - Nestlé India - ICICI Direct

Q3FY21 Result Update - Time Technoplast - ICICI Direct

Healthy Business Performance Puts ITC Stock Recovery on Track

Gold - Feb 17, 2021 - Reliance Securities

Maintain REDUCE on Nestle India - Steady revenue show; employee cost dents margins - HDFC Securities

Varun Beverages - Q4 CY20 Result and Concall Update - YES Securities

Nestle India - Q4 CY20 Result Update - YES Securities

Reiterate BUY on JMC Projects - Some hits, some misses - HDFC Securities

Varun Beverages - Strong volumes; higher margins - ICICI Securities

Computer Age Management Services - Play on industry AUM growth - ICICI Securities

Nestle India - Just a tad underwhelming (given the high benchmarks expected from Nestle India) - ICICI Securities

NHPC - Earnings robust; projects on track - ICICI Securities

Maintain BUY on ITD Cementation - Gradual recovery shaping up - HDFC Securities

Techno Electric & Engineering - Strong margins, healthy growth outlook - ICICI Securities

Time Technoplast - Outlook upbeat; execution remains key - ICICI Securities

Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2020