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Company update: Sobha — Reduce — TP Rs.510
Publish date: July 9, 2018
Strong sales momentum, diversified contribution
Sobha saw its sales grow by 18% in volume and 9% in value terms in the first quarter of FY2019. The company is also slated to launch multiple projects in later quarters.
Key Highlights
We recently met the company’s chairman, chief financial officer (CFO) and the director strategy and here are some of the takeaways from the meeting:
- The company collected Rs.7.6 billion for selling 0.96 million square feet of area in the first quarter of FY2019.
- The collections were strong from tier-II cities.
- The high collections will help the company reduce its debt.
- Its projects are in various stages of completion. The collections are expected to surge further due to strong sales from near-completed projects.
- Among the many projects launched, the company has planned to invest Rs.5 billion in Gujarat International Finance Tech City (GIFT City).
Valuation & outlook
We expect Sobha to continue flourishing in the residential segment. But we advise ‘reduce’ because we believe the stock is fairly valued.
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