Sobha rallies 17%; CLSA maintains ‘Buy’ rating

NEW DELHI: Shares of Sobha Limited rallied over 17 per cent on Monday after CLSA has maintained buy rating on real estate firm as the company's second quarter pre-sales rose 14 per cent year-on-year to a ten-quarter high.

The global brokerage house said it sees Sobha's pre-sales to do well for the next few quarters.

“Sobha’s 2Q pre-sales rise of 14 per cent YoY to a 10-quarter high comes amid a challenging period of RERA regulatory regime transition, which had significantly curtailed project marketing and new launch capability for the industry," said CLSA in a note released late Friday.

The scrip gained 17.43 per cent to close the session at Rs 459.45 on BSE. Shares of the company opened at Rs 411 and touched a high and low of Rs 469.50 and Rs 411, respectively.

The stock had hit 52-week high of Rs 449.05 on May 17, 2017 and 52-week low of Rs 224.05 on November 22, 2016.

Given good traction in the first half of the year, Sobha should now be able to break its three-year pre-sales downtrend, the brokerage said.

“We currently estimate Sobha’s FY18 pre-sales to cross Rs 21.0 billion, a four-year high, and see upside risk to our estimate," said CLSA.