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HDFC Securities Sees 66% Upside in Sobha on Growth Outlook
Sobha is a company that builds homes.
Its home sales were strong in the first half of FY27, even though sales were lower in the second quarter than in the first.
The company has many new projects planned in several cities.
HDFC Securities thinks Sobha’s business could grow and its profits could improve.
It set a price target of ₹1,930 for the shares.
That is about 66% above the share price on October 9.
But Sobha’s shares had fallen 21% over the previous three months.
The expected gains depend on the company launching projects, keeping demand strong and improving its margins.
HDFC Securities maintained a Buy rating on Sobha and set a target price of ₹1,930, about 66% above its October 9 closing price of ₹1,161.70.
Sobha recorded first-half FY27 presales of ₹5,860 crore, up 47% year-on-year; Q2 presales were ₹2,210 crore, down 40% sequentially after a record Q1.
The company launched 7.9 million square feet in the first half, with a gross development value of ₹11,200 crore, about 75% of its full-year launch guidance.
HDFC Securities expects margin improvement in the second half of FY27, citing revenue recognition from an ₹18,600 crore unrecognised revenue book.
Sobha shares had fallen 21% over three months; the brokerage’s bullish outlook depends on project execution, demand and margin improvement.
- Who
- Sobha and brokerage HDFC Securities.
- What
- HDFC Securities maintained a Buy rating on Sobha and set a ₹1,930 target price, citing sales, planned launches and expected margin improvement.
- Where
- Sobha’s cited markets include Bengaluru, the National Capital Region, Pune, Kerala and other cities.
- When
- The outlook was reported after Sobha’s Q2 FY27 results; the comparison share price is the October 9 close.
- Why
- HDFC Securities expects growth from a strong project pipeline, resilient demand, pricing strength, execution and improving margins.
Key facts
- Brokerage rating
- Buy, maintained by HDFC Securities
- Target price
- ₹1,930 per share
- Reference closing price
- ₹1,161.70 on October 9
- Implied upside
- More than 66% from the October 9 closing price
- Q2 FY27 presales
- ₹2,210 crore; up 16% year-on-year and down 40% quarter-on-quarter
- First-half FY27 presales
- ₹5,860 crore, up 47% year-on-year
- First-half launches
- 7.9 million square feet, with ₹11,200 crore gross development value
- Three-month share performance
- Down 21%
Quotes
HDFC Securities
Brokerage house that issued the Sobha research report
“Overall, the quarter has reinforced the demand resilience, brand-led pricing strength, and execution consistency that have underpinned SDL's recent growth trajectory, setting a strong base heading into the rest of FY27.”
livemint.com
“We expect INR 60bn of new launches in Q3FY27 including crystal meadows phase 1 INR 20bn, Gurugram 63A phase 2- INR 15bn, Hyderabad INR 15bn and whitefield INR 10bn.”
livemint.com
Sources
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