Weak Q2 sales pushes Sobha share price 4% lower on October 8

Sobha Limited share price: Real estate developer Sobha Limited shares dropped up to 3.66 per cent to hit an intraday low of Rs 1,675.35 per share on Tuesday, October 08, 2024. 

The share price of Sobha fell after the company reported a weak set of September quarter updates (Q2FY25).

Sobha’s new sales plunged 44.9 per cent year-on-year (Y-o-Y) to 929,907 square feet in Q2FY25, from 1,686,196 square feet in Q2FY24. 

The real estate major’s total sales value dropped  31.6 per cent annually to Rs 1,178.5 crore in the September quarter of FY25, from Rs 1,723.8 crore in the September quarter of FY24. 

Sobha share of sales value also slipped 23 per cent to Rs 982.8 crore in Q2FY25, as opposed to Rs 1,275.6 crore in Q2FY24. 

On the flipside, average price realisation jumped to Rs 12,674 per square feet in Q2FY25, from Rs 10,223 per square feet in Q2FY24.

Additionally, Kerala saw its best ever quarterly sale of 0.3 million square feet with value of Rs 338.1 crore.

The company also launched SOBHA Infinia with a total saleable area of 490,254 square feet, in Bangalore. 

“The project is in close proximity to Koramangala, with excellent access and connectivity to other major areas like HSR Layout, ORR and Marathahalli. This luxury project is spread over 2.9 acres comprising 196 units of 3 and 4 BHK configurations (sizes ranging from 1,768 square feet to 3,264 square feet), with a 22,000 square feet clubhouse,” the company highlighted. 

With housing demand remaining healthy, analsyts at Nuvama Institutional Equities reckon the sales momentum shall improve going ahead.

Hence, the brokerage has maintained its 'Buy' with a revised target price of Rs 2,244 (earlier Rs 2,262) with a valuation rollover to Q2FY27E.

Sobha Limited, founded by PNC. Menon in 1995, is a real estate developer.  With a strong presence in 27 cities across 14 states, the company has expanded its operations internationally to Oman and Dubai under the brand Sobha Realty. 

Sobha Limited operates in two primary segments including real estate and contractual manufacturing, offering a diverse range of products, including luxury apartments, villas, row houses, and plotted developments.

In addition to its real estate ventures, Sobha Limited also focuses on manufacturing, producing interiors, glazing, metal works, and concrete products. 

The company boasts a robust portfolio of corporate clients, including major names such as Infosys, Biocon, Dell, and HP. 

At 12:25 PM, Sobha shares were trading 0.06 per cent lower at Rs 1,738 per share. In comparison, BSE Sensex was trading 0.40 per cent higher at 81,372.23 levels.