Target: ₹2,459

CMP: ₹1,508.70

Sobha Ltd reported a strong Q1FY26 presales performance, up 11 per cent y-o-y to ₹2,080 crore, driven by robust sustenance sales in Gurugram, Bengaluru, and other markets (₹1,000 crore), along with healthy new launches contributing ₹1,080 crore (72 per cent of the ₹1,500 crore launched GDV).

The company also delivered 1.07 msf across key projects, showcasing its execution strength and in-house development capabilities. H2FY26 is expected to see an even stronger momentum, with big launches including Gurgaon Sector 63A, Pune, Mumbai and Bengaluru.

These launches could drive presales of ₹6,000 crore in H2FY26, setting the stage for FY26 presales to cross ₹10,000 crore. This growth trajectory reinforces confidence in Sobha’s ability to sustain strong sales performance, supported by strategic market presence and high-demand projects.

Regulatory approvals are now back on track, particularly in key markets like NCR/Bengaluru. This easing of approvals should help launch acceleration over the next 2-3 quarters.

Sobha maintains a strong balance sheet (net cash-to-equity at 0.13x) and liquidity of ₹700 crore.

Valuation comfort, robust FCF generation, and likely deleveraging are key near-term triggers for further rerating.

Given the robust launch pipeline, strong balance sheet, and stable cash flows, we maintain Buy on Sobha with a TP of ₹2,459.

Published on July 9, 2025