Sobha stock price jumps 18% amid strong sales volume in Q2; share hits new 52-week high - check analysts view

On the back of strong sales volume, the shares of real estate developer Sobha Limited jumped nearly 18 per cent to touch a fresh 52-week high of Rs 892 on the BSE intraday trade on Thursday.

The small-cap company in its quarterly update has said in a filing to exchanges that it has achieved best ever sales volume of 1.35 million sq ft valued at Rs 1,030.2 crore during the second quarter of the financial year 2021-22 (Q2FY22). 

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The company had reported a total sales value of Rs 682.90 crore in Q1FY22 and Rs 689.90 crore in Q2FY21, Sobha said in a statement on Wednesday.

The structural changes in real estate sector have created never before opportunities for the established, financially strong and multi-location-based developers to capitalise on the gradual but stable pickup in housing demand, Sobha said in its Q2FY22 operational update.

The consensus of most of the experts in this sector remain that the work from home, low interest rates, increased affordability, significant pickup in the prospects of IT sector and increase in salaries etc. and focus of banking sector to support home buyers augur well for the sustainability in the demand, the company said. 

“Steady reduction in unsold inventory and demand revival are lifting the housing market out of the down cycle. Prices are nosing up. This along with potential market share gains places organized developers in a sweet spot,” it added.

The stock in the last three months has outperformed the benchmark index and gained over 72 per cent on the BSE as compared to 13 per cent rise in the S&P BSE Sensex.

Angel One Equity Research Analyst Yash Gupta says, “We have seen very strong demand in geographics like Bengaluru, Gurugram, Pune etc during the quarter and we expect sales momentum to continue for the coming quarters on back of festival seasons and lowest home loan interest rate. We continue with our buy call on Sobha Limited.”

“Sobha limited reported best ever sales volumes for the quarter Q2FY22, company reported pre-sales of 1.34 Mn sqft up by 51 per cent as compared to 0.89 of Q2FY21. Bengaluru market again top performer for the company sales up by 48 per cent at 0.8 Mn Sqft while other markets like Gurugram at 0.18 Mn sqft, Kochi at 0.11 Mn sqft,” Gupta added.