Sobha share price jumps 6% after CLSA retains outperform rating, raises target price

Sobha share price jumped 6 percent in the morning session on October 6 after CLSA maintained its outperform call on the stock.

The global research firm retained the outperform rating and raised the target to Rs 270 from Rs 252 per share. The company reported a sharp recovery in its pre-sales to 0.9 million square feet. Industry sales in Bengaluru are still 50 percent below pre-COVID level, according to a report by CNBC-TV18.

CLSA sees a marginal increase in debt due to its dividend payment in Q2 and has increased its presales estimates for FY21-23.

The stock was trading at Rs 253.10, up Rs 13.95, or 5.83 percent at 0920 hours. It has touched an intraday high of Rs 258.80 and an intraday low of Rs 248.65.

The real estate developer's dependency on city sales volume reduced from 74 percent during the first quarter of FY21 to 60 percent in the second.

“During Q2 FY21, we have achieved this despite lockdown being imposed in Bengaluru in the month of July, no new launch during the quarter, uncertain macro-economic outlook and tough real estate sector scenario. Sales volume, total sales value and Sobha share of sales value during Q2 were up by 37 percent, 41 percent, 35 percent, respectively, as compared to Q1,” the company told the exchanges.

According to Moneycontrol SWOT Analysis powered by Trendlyne, the company has been effectively using its capital to generate profit- RoCE improving in the last two years.

Moneycontrol technical rating is bullish, with moving averages and technical indicators being bullish.