Fan Site: Inspired, Not Endorsed, By Rakesh Jhunjhunwala

Sobha’s landbank rationalization; pipeline provides healthy visibility. Buy for target price of ₹2213 (44% upside): Motilal Oswal



Landbank rationalization; pipeline provides healthy visibility

Valuation and view

 SOBHA continues to provide strong growth visibility by unlocking its vast land reserves. Additionally, the ongoing fund raise and strong cash flows will enable the company to focus on new land acquisitions, which will further enhance its growth pipeline.

 We incorporate the updated launch pipeline and new projects acquired during the year. The ongoing and upcoming projects are likely to generate INR150b of gross cash flows and value the same at INR95b.

 SOBHA’s ~190msf of balance land reserve is valued at INR90b, assuming 25-75 years of monetization. The company trades at 8.5x FY25E EV/EBITDA (based on FY25E pre-sales), which is at a 15-30% discount to its comparable peers (PEPL, GPL, MLDL, and Sunteck).

 We reiterate our BUY rating on the stock with an unchanged TP of INR2,213, indicating a 44% upside potential.

Sobha’s landbank rationalization; pipeline provides healthy visibility

investments

No Comments Yet

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 509 other subscribers

RSS Stocks Talk Forum

  • Piramal Pharma is seeing strong momentum in CDMO. Buy for TP ₹320 (27% upside)
    Piramal Pharma is seeing strong momentum in CDMO. Postponement of the Biosecure Act is unlikely to cause growth related issues as China rebalancing drive by global innovators likely to continue. Other growth levers are intact. Buy for TP ₹320 (27% upside) Download report... Piramal Pharma is seeing strong momentum in CDMO. Buy for TP ₹320 […]
  • The "Golden Crossover" strategy signals a Bullish trend is underway & yields multibagger returns
    Expert says the "Golden Crossover" strategy, where the 50 DMA crosses above the 200 DMA, signals that a Bullish trend is underway. It yields multibagger returns. Top investors & traders use this. There are scanners which reveal when crossover is happening ET's screener shows stocks which have undergone the "golden crossover" in the recent past. […]
  • Hiren Ved has no Banking stocks in his portfolio.
    Hiren Ved has no Bank stocks in his portfolio because Banks are unable to get cheap deposits & lend profitably. People are investing in SIPs instead of FDs & Capital Market stocks are better than Bank stocks. HDFC AMC is a better investment than HDFC Bank [youtube https://www.youtube.com/watch?v=O4SA4czZqY0]
Disclaimer: This is a Fan Site in Rakesh Jhunjhunwala's name. Rakesh Jhunjhunwala is not associated with us and is in no way aware, accountable or responsible for what is stated here. Further, nothing here constiutes investment advice for you to act on. Also, we have a vested interest, and are extremely biased, in everything that we say. So Mind It!