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ICIC
I S
ecurit
ies –
Retail E
quit
y R
esearch
Result
Update
May 29, 2019
CMP: | 537 Target: | 620 ( 16%) Target Period: 12 months
Sobha Ltd (SOBDEV)
BUY
Sales momentum to continue to remain strong
Sobha’s topline grew strongly by 81.6% YoY to | 1,397.8 crore led by
102.9% YoY growth in revenues from real estate division to | 1,017.3 crore.
EBITDA margins contracted 30 bps YoY to 17.4% and were below our
estimate of 20.8%. PAT grew robustly by 73.2% YoY to | 113.3 crore (our
estimate: | 62.5 crore) led by strong topline growth.
Sales volumes grow 11.2% YoY in Q4FY19
Sobha achieved highest ever sales volumes of 1.13 million sq ft (msf) (11.2%
YoY growth) with a sales value of | 920.5 crore at an average realisation of
| 8,152/sq ft in Q4FY19. Bengaluru market contributed 74.3% to the overall
sales volume during the quarter with 11.8% YoY growth in sales volume.
While sales at Gurgaon (Sobha’s another key focus market), de-grew 12.0%
YoY, it grew 34.4% QoQ to 0.67 lakh sq ft in Q4FY19. Total sales collections
in Q4FY19 were at | 922.9 crore. Overall, the company clocked 4.03 msf
sales volumes (10.9% YoY growth) with total sales value worth | 3,122.5
crore and achieved collections worth | 3,236 crore in FY19.
Plans launches of 4.19 msf in FY20E
Sobha launched three projects (3.35 msf total saleable area) in GIFT City,
Bengaluru and Chennai in Q4FY19. The company has 9.07 msf area that is
yet to be released for sale in ongoing projects. Additionally, it further plans
to launch eight projects across 4.19 msf area in Bengaluru, Chennai, Pune,
Coimbatore & Thrissur in FY20E. While Sobha would need incremental debt
to fund its upcoming launches, it aims to maintain net D/E at ~1.1x, going
ahead. Overall, with healthy project launches in FY19 & FY20E, we expect
sales volumes of 4.2 each msf in FY20E/FY21E, respectively.
Contractual business revenues grow 39.7% YoY in Q4FY19
Sobha’s contractual revenues grew 39.7% YoY growth to | 420.1 crore in
Q4FY19. The company’s contractual orderbook of | 2,588 crore gives strong
revenue visibility for the next few years. Currently, Sobha is executing
orders for 8.6 msf area across 10 cities in India. Overall, we build in
contractual revenue growth at 21.7% CAGR to | 1163.8 crore in FY18-20E.
Valuation & Outlook
Sobha reported highest ever sales volume of 1.1 msf in Q4FY19. Bengaluru,
Sobha’s key market continues to witness strong traction with one of lowest
inventory overhang of 15 months. Coupled with its healthy launch pipeline
and more focus on affordable housing, we expect Sobha’s sales momentum
to sustain. Hence, we maintain BUY recommendation on Sobha with a
revised target price of | 620/share. Sobha’s net D/E at 1.0x is relatively higher
than its peers and remains the key monitorable for re-rating of the stock.
Key Financial Summary
| crore FY17 FY18 FY19E FY20E FY21E CAGE FY19-21E
Net Sales 2229.0 2783.0 3442.1 3794.8 4469.3 13.9%
EBITDA 419.8 519.7 673.3 750.1 904.0 15.9%
EBITDA Margin (%) 18.8 18.7 19.6 19.8 20.2
PAT 160.8 216.8 297.1 334.6 407.5 17.1%
EPS(|) 16.7 22.9 31.3 35.3 43.0
P/E (x) 32.2 23.5 17.1 15.2 12.5
EV/EBITDA (x) 17.5 14.3 11.2 10.3 8.5
RoNW (%) 6.1 7.8 13.3 13.7 15.1
RoCE (%) 7.7 9.7 14.7 15.6 17.9
Source: Company, ICICI Direct Research
Particulars
Particular Amount (| crore)
Market Capitalization 5,266.0
Total Debt 2,442.7
Cash and Investments 177.2
EV 7,531.5
52 week H/L (|) 553 / 381
Equity capital 94.8
Face value (|) 10.0
Key Highlights
Sobha achieved highest ever sales
volumes of 1.13 msf in Q4FY19
Plans to launch project on 4.19 msf
area in FY20E
Sobha’s contractual revenues grew
39.7% YoY growth to | 420.1 crore in
Q4FY19
Maintain BUY with target price of
| 620/share
Research Analyst
Deepak Purswani, CFA
deepak.purswani@icicisecurities.com
Harsh Pathak
harsh.pathak@icicisecurities.com
ICICI Securities | Retail Research 2
ICICI Direct Research
Result Update | Sobha Ltd
Exhibit 1: Variance Analysis
| crore Q4FY19 Q4FY19E Q4FY18 YoY (Chg
%)
Q3FY19 QoQ (Chg
%)
Comments
Income from Operation 1,397.8 681.4 769.6 81.6 787.9 77.4Topline growth on account of strong growth in
real estate division
Other Income 23.8 12.4 19.6 21.4 19.8 20.2
Material & construction cost 660.1 497.0 414.1 59.4 673.5 -2.0
Employee cost 65.6 61.3 52.6 24.7 58.8 11.6
Other expenditure 136.5 113.8 110.1 24.0 108.8 25.5
EBITDA 243.5 146.7 136.4 78.5 159.0 53.1
EBITDA Margin (%) 17.4 21.5 17.7 -30 bps 20.2 -276 bps
Depreciation 15.9 14.9 13.5 17.8 16.1 -1.2
Interest 75.8 54.1 51.8 46.3 53.1 42.7
PBT 175.6 90.1 90.7 93.6 109.6 60.2
Taxes 62.3 27.0 25.3 146.2 39.8 56.5
PAT 113.3 63.1 65.4 73.2 69.8 62.3 PAT growth was led by strong topline growth
Key Metrics
Sales Volume (msf) 1.1 1.0 11.2 0.9 24.3
Realisation (|) 8,151.3 6,456.6 26.2 6,604.1 23.4
Source: Company, ICICI Direct Research
Exhibit 2: Change in estimates
FY19 FY20E FY21E Comments
(| Crore) Old New % Change Introduced
Revenue 2,229.0 2,783.0 3,442.1 3,440.5 3,794.8 10.3 4,469.3 We introduce FY21E estimates
EBITDA 419.8 519.7 673.3 742.7 750.1 1.0 904.0
EBITDA Margin (%) 18.8 18.7 19.6 21.6 19.8 -183 bps 20.2
PAT 160.8 216.8 297.1 336.4 334.6 -0.5 407.5
EPS (|) 16.7 22.9 31.3 35.5 35.3 -0.5 43.0
FY17 FY18
Source: Company, ICICI Direct Research
Exhibit 3: Assumptions
Earlier Current Earlier Introduced Comments
Volume sold in msf FY18 FY19 FY19E FY20E FY20E FY21E
Total 4.2 3.9 4.0 4.2 4.1 4.2 We introduce FY21E estimates
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 3
ICICI Direct Research
Result Update | Sobha Ltd
Conference call Highlights
Sector overview: Though there are many tailwinds, the real estate sector
is currently unable to tap its full potential due to the NBFC crisis.
Nonetheless, consolidation is happening in the sector with developers
having healthy execution record and comfortable financial position
poised to reap the biggest benefits, going ahead. Also, with limited
housing supply getting added by stressed developers and with demand
seen intact, the management expects housing prices to increase, going
ahead
Management guidance: It expects the company’s performance in FY20E
to be better than its FY19 performance in terms of sales volume and
value. Bengaluru is expected to remain the top contributor to this
performance, followed by NCR market. However, sales in non-Bengaluru
will be higher on account of lower base. Overall, while demand is yet to
fully recover, the management expects all its present markets to show
good growth in FY20E. Also, it sees major demand coming from ticket
size up to | 2 crore, going ahead. On the pricing front, the management
does not see any meaningful improvement in the company’s blended
realisation as higher contribution to sales volumes in FY20E are
expected from the affordable housing segment
New launches: Sobha launched three projects in Q4FY19 – Sobha
Dream Heritage (0.52 msf saleable area) affordable housing project at
GIFT City; Sobha Royal Pavilion (2.23 msf saleable area) super luxury
residential project in Bangalore; and Sobha Palacia (0.60 msf saleable
area) super luxury project In Chennai. The company further plans to
launch projects across 4.19 msf projects in FY20E mainly on legacy land
bank. Furthermore, it could launch even more projects in FY20E, subject
to necessary approvals from authorities in place
Q4FY19 financial performance and EBITDA margin comment: Sobha
Dream Acres & Sobha Indraprastha contributed significantly to total
revenues in Q4FY19. On the EBITDA margin front, it was lower at 17.4%
in Q4FY19 as there was a reverse discounting on adjustment of interest
cost under Ind-As 115. According to this, the company took reverse
discounting of advance worth | 100 crore already received from
customers, which had 1.4% negative impact on EBITDA margin in
Q4FY19
GST treatment: Two of the affordable housing projects – GIFT City and
Sobha Dream Gardens, will be treated under 1% GST (without input tax
credit benefits). All other projects launched before April 1, 2019 will
follow the earlier GST structure i.e. 12% GST for all housing (8% for
affordable housing) with input tax benefits
Debt update: On account of strong launches planned ahead, the
management expects debt to go up from current level. However, it aims
to maintain the net D/E at ~1.1x, going ahead
Collections: The lag in collections growth rate compared to the pre-sales
growth rate is due to higher proportion of sales volumes coming from
new launches that took place in the past one and a half to two years and
major portion of the collection coming towards the completion of the
project. However, the management expects this lag to narrow down in
the coming year or two
Mattress business: Sobha has taken up 3,000 sq ft of retail space in
corporate office itself to foray in this business. It is further taking up
25,000 sq ft commercial space housing 3,000 SKUs to scale up in the
B2C category. The management sees this segment contributing
meaningfully to the overall company’s growth in next five to six years
ICICI Securities | Retail Research 4
ICICI Direct Research
Result Update | Sobha Ltd
Company Analysis
Exhibit 4: Quarterly sales trend
Particulars Q4FY18 Q1FY19 Q2FY19 Q3FY19 Q4FY19 YoY QoQ
Bengaluru
Sales Volume (Sq ft) 750,375 612,944 702,072 613,816 838,957 11.8% 36.7%
Average Realisation (|/sq ft) 6,958 6,819 6,887 7,002 7,964 14.5% 13.7%
Sale Value (| crore) 522.1 418.0 483.5 429.8 668.1 28.0% 55.5%
Thrissur
Sales Volume (Sq ft) 6,425 27,400 17,247 16,304 5,429 -15.5% -66.7%
Average Realisation (|/sq ft) 9,049 8,868 8,956 7,680 8,583 -5.1% 11.8%
Sale Value (| crore) 5.8 24.3 15.4 12.5 4.7 -19.9% -62.8%
Coimbatore
Sales Volume (Sq ft) 25,127 31,004 46,807 17,228 17,766 -29.3% 3.1%
Average Realisation (|/sq ft) 3,918 3,840 3,878 4,273 5,130 30.9% 20.1%
Sale Value (| crore) 9.8 11.9 18.2 7.4 9.1 -7.4% 23.8%
Pune
Sales Volume (Sq ft) 5,727 1,104 4,825 5,936 - -100.0% -100.0%
Average Realisation (|/sq ft) 9,957 9,757 9,855 6,418 - -100.0% -100.0%
Sale Value (| crore) 5.7 1.1 4.8 3.8 0.0 -100.0% -100.0%
Mysore
Sales Volume (Sq ft) 10,944 49,371 61,881 50,836 18,574 69.7% -63.5%
Average Realisation (|/sq ft) 1,868 1,831 1,849 1,851 2,287 22.4% 23.6%
Sale Value (| crore) 2.0 9.0 11.4 9.4 4.2 107.8% -54.9%
NCR
Sales Volume (Sq ft) 75,733 102,190 132,875 49,561 66,616 -12.0% 34.4%
Average Realisation (|/sq ft) 6,825 6,689 6,756 7,671 10,928 60.1% 42.5%
Sale Value (| crore) 51.7 68.4 89.8 38.0 72.8 40.8% 91.5%
Chennai
Sales Volume (Sq ft) 20,100 48,253 43,731 34,705 49,652 147.0% 43.1%
Average Realisation (|/sq ft) 4,914 4,815 4,864 8,213 8,385 70.6% 2.1%
Sale Value (| crore) 9.9 23.2 21.3 28.5 41.6 321.5% 46.1%
Calicut
Sales Volume (Sq ft) 4,871 12,192 9,438 2,061 15,814 224.7% 667.3%
Average Realisation (|/sq ft) 5,820 5,703 5,760 5,038 7,016 20.6% 39.3%
Sale Value (| crore) 2.8 7.0 5.4 1.0 11.1 291.4% 968.6%
Cochin
Sales Volume (Sq ft) 116,409 75,627 12,726 118,377 111,425 -4.3% -5.9%
Average Realisation (|/sq ft) 5,345 5,238 5,291 5,892 9,502 77.8% 61.3%
Sale Value (| crore) 62.2 39.6 6.7 69.7 105.9 70.2% 51.8%
Gift City
Sales Volume (Sq ft) 0.0 0.0 0.0 0.0 5036.0 - -
Average Realisation (|/sq ft) 0.0 0.0 0.0 0.0 5819.0 - -
Sale Value (| crore) 0.0 0.0 0.0 0.0 2.9 - -
Total
Sales Volume (Sq ft) 1,015,711 960,085 1,031,602 908,824 1,129,269 11.2% 24.3%
Average Realisation (|/sq ft) 6,635 6,502 6,567 6,455 6,584 -0.8% 2.0%
Sale Value (| crore) 655.8 611.8 616.6 600.2 920.5 40.4% 53.4%
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 5
ICICI Direct Research
Result Update | Sobha Ltd
Exhibit 5: Quarterly net D/E trend
2199.2
2263
2365
2399
2433.7
0.79 0.800.83 0.83
1.09
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1000.0
1500.0
2000.0
2500.0
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
(x)
(| crore)
Source: Company, ICICI Direct Research
Exhibit 6: Yearly net D/E trend
2,075.1
2,189.3
2,265.5
2,432.0
2,411.2
0.78
0.79
1.02 1.00
0.89
0.50
0.60
0.70
0.80
0.90
1.00
1.10
500.0
1,000.0
1,500.0
2,000.0
2,500.0
FY17 FY18 FY19E FY20E FY21E
(x)
(| crore)
Net debt Net debt to equity
Source: Company, ICICI Direct Research
Exhibit 7: Yearly sales volumes trend
3.0
3.63.9
4.2
2.4
1.5
2.0
2.5
3.0
3.5
4.0
4.5
FY17 FY18 FY19E FY20E FY21E
(m
n s
q feet)
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 6
ICICI Direct Research
Result Update | Sobha Ltd
Exhibit 8: Revenue trend
2,243.7
2,787.1
3,323.3
3,667.7 3,577.6
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
4,000.0
FY17 FY18 FY19E FY20E FY21E
(| crore)
Source: Company, ICICI Direct Research
Exhibit 9: Real estate revenue trend
1,485.9
2,000.7
2,265.3
2,503.9
2,297.4
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
FY17 FY18 FY19E FY20E FY21E
(| crore)
Source: Company, ICICI Direct Research
Exhibit 10: Construction estate revenue trend
757.8 786.4
1,058.0
1,163.8
1,280.2
300.0
450.0
600.0
750.0
900.0
1,050.0
1,200.0
1,350.0
FY17 FY18 FY19E FY20E FY21E
(| crore)
Source: Company, ICICI Direct Research
Exhibit 11: EBITDA and EBITDA margin trend
419.8 519.7 673.3 750.1 904.0
18.8 18.7
19.6 19.8 20.2
15.0
20.0
25.0
200.0
400.0
600.0
800.0
FY17 FY18 FY19E FY20E FY21E
(%
)
(| crore)
EBITDA EBITDA Margin
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 7
ICICI Direct Research
Result Update | Sobha Ltd
Exhibit 12: PAT trend
160.8
216.8
297.1
334.6
407.5
3.0
6.0
9.0
12.0
15.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
FY17 FY18 FY19E FY20E FY21E
(%
)
(| crore)
PAT PAT Margin
Source: Company, ICICI Direct Research
Exhibit 13: Return ratios to improve, going ahead
6.1
7.8
13.3
13.7
15.1
7.7
9.7
14.7 15.6
17.9
-
5.0
10.0
15.0
20.0
FY17 FY18 FY19E FY20E FY21E
(%
)
RoE RoCE
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 8
ICICI Direct Research
Result Update | Sobha Ltd
Valuation & Outlook
Sobha reported highest ever sales volume of 1.1 msf in Q4FY19. Bengaluru,
Sobha’s key market continues to witness strong traction with one of lowest
inventory overhang of 15 months. Coupled with its healthy launch pipeline
and more focus on affordable housing, we expect Sobha’s sales momentum
to sustain. Hence, we maintain BUY recommendation on Sobha with a
revised target price of | 620/share. Sobha’s net D/E at 1.0x is relatively higher
than its peers and remains the key monitorable for re-rating of the stock.
Exhibit 14: Valuation
Mn sq ft | crore | /share | crore | /share
Completed projects (A) 0.3 448.2 47.3 1.0 448.2 45.7
Ongoing & Proposed projects (B) 24.1 2812.9 296.7 1.0 2812.9 287.0
Other Land Bank (C) 199.6 4605 485.8 1.0 4605.3 485.8
Real Estate Business value (A+B+C) 224.0 7866.4 829.8 1.0 7866.4 818.6
Less:
Net debt 2432 256.5 2432.0 256.5
Land cost outstanding 143 15.1 142.9 15.1
Real Estate equity value 5291 558.2 1.00 5291.5 546.9
Construction Business 5x FY20E EV/EBITDA 679.6 71.7
Total SoTP Valuation 5971.1 618.6
Rounded off Target price 620.0
NAV Fair valueNAV
multiple (x)
Source: Company, ICICI Direct Research
Exhibit 15: Valuation metrics
Sales Growth EPS Growth PE EV/EBITD RoNW RoCE
(| cr) (%) (|) (%) (x) (x) (%) (%)
FY17 2,229.0 14.7 16.7 18.5 28.8 16.2 6.1 7.7
FY18 2,783.0 24.9 22.5 34.9 21.4 13.3 7.8 9.7
FY19E 3,442.1 23.7 30.8 37.0 15.6 10.4 13.3 14.7
FY20E 3,794.8 10.2 34.7 12.6 13.8 9.5 13.7 15.6
FY21E 4,469.3 17.8 42.3 21.8 11.4 7.9 15.1 17.9
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 9
ICICI Direct Research
Result Update | Sobha Ltd
Exhibit 16: Recommendation History vs. Consensus
0.0
20.0
40.0
60.0
80.0
100.0
0
150
300
450
600
750
May-19Feb-19Nov-18Aug-18May-18Feb-18Dec-17Sep-17Jun-17Mar-17Dec-16Sep-16Jun-16Mar-16
(%
)(|)
Price Idirect target Consensus Target Mean % Consensus with BUY
Source: Bloomberg, Company, ICICI Direct Research
Exhibit 17: Top 10 Shareholders
Rank NameLatest Filing
Date
O/SPosition
(m)
Change
(m)
1 Menon (Sobha) 3-Apr-19 34.5% 32.7 -2.9
2 Menon (P N C) 31-Mar-19 18.3% 17.4 0.0
3 Franklin Templeton Asset Management (India) Pvt. Ltd. 31-Mar-19 7.5% 7.1 0.5
4 Schroder Investment Management (Hong Kong) Ltd. 31-Mar-19 6.8% 6.5 0.6
5 L&T Investment Management Limited 31-Mar-19 3.7% 3.5 1.0
6 Menon (Ravi) 3-Apr-19 3.1% 3.0 2.9
7 Nordea Funds Oy 31-Mar-19 2.1% 2.0 -1.6
8 Dimensional Fund Advisors, L.P. 31-Mar-19 1.9% 1.8 -0.1
9 SBI Funds Management Pvt. Ltd. 31-Mar-19 1.6% 1.5 0.2
10 The Vanguard Group, Inc. 30-Apr-19 1.5% 1.5 0.0
Source: Reuters, ICICI Direct Research
Exhibit 18: Recent Activity
Investor name Value (m) Shares (m) Investor name Value (m) Shares (m)
Menon (Ravi) 20.0 2.9 Menon (Sobha) -20.0 -2.9
L&T Investment Management Limited 7.6 1.0 Nordea Funds Oy -12.2 -1.6
Schroder Investment Management (Hong Kong) Ltd. 4.7 0.6 Norges Bank Investment Management (NBIM) -9.3 -1.4
Franklin Templeton Asset Management (India) Pvt. Ltd. 3.4 0.5 Pzena Investment Management, LLC -1.5 -0.2
Manulife Asset Management (Asia) 1.6 0.2 Alpine Woods Capital Investors, LLC -1.2 -0.2
Buys Sells
Source: Reuters, ICICI Direct Research
Exhibit 19: Shareholding Pattern
(in %) Jun-18 Sep-18 Dec-18 Mar-19
Promoter 55.9 55.9 56.0 56.0
Public 44.1 44.1 44.0 44.0
Others 0.0 0.0 0.0 0.0
Total 100.0 100.0 100.0 100.0
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 10
ICICI Direct Research
Result Update | Sobha Ltd
Financial summary
Exhibit 20: Profit and loss statement | crore
(| Crore) FY18 FY19 FY20E FY21E
Net Sales 2,783.0 3,442.1 3,794.8 4,469.3
Growth (%) 24.9 23.7 10.2 17.8
Other income 49.5 73.5 77.2 81.0
Total revenue 2,832.5 3,515.6 3,872.0 4,550.3
Raw Material Expense 1,680.0 2,056.1 2,260.7 2,703.0
Land cost 46.6 103.0 94.6 89.0
Employee benefit expenses 198.5 235.9 259.5 285.4
Other Expenses 384.8 476.8 524.5 576.9
EBITDA 519.7 673.3 750.1 904.0
Growth (%) 23.8 29.6 11.4 20.5
Interest 197.8 236.2 259.5 305.3
Depreciation 54.4 62.3 64.6 66.8
Other income 49.5 73.5 77.2 81.0
PBT 317.0 448.3 503.2 612.8
Taxes 100.2 151.2 168.6 205.3
Minoriy Interest - - - -
PAT after MI 216.8 297.1 334.6 407.5
PAT Growth rate 34.9 37.0 12.6 21.8
Adjusted EPS (Diluted) 22.5 30.8 34.7 42.3
Source: Company, ICICI Direct Research
Exhibit 21: Cash flow statement | crore
(| Crore) FY18 FY19E FY20E FY21E
Profit after Tax 216.8 297.1 334.6 407.5
Depreciation 54.4 62.3 64.6 66.8
Interest 197.8 236.2 259.5 305.3
Others (246.1) (224.7) (245.7) (286.3)
Cash Flow before wc changes 323.1 522.1 581.6 698.7
Net Increase in Current Assets (212.2) (1,589.7) (711.6) (359.1)
Net Increase in Current Liabilities 242.6 2,373.8 454.3 240.8
Net CF from operating activities 353.4 1,306.2 324.2 580.4
(Purchase)/Sale of Fixed Assets (59.7) (129.4) (185.0) (185.0)
Net CF from Investing activities (128.7) (56.2) (107.8) (104.0)
Inc / (Dec) in Equity Capital (62.0) (0.0) - -
Dividend (29.0) (109.5) (123.4) (150.3)
Interest paid (260.6) (236.2) (259.5) (305.3)
Inc / (Dec) in Loans 108.8 134.0 - -
Net CF from Financing activities (242.8) (211.8) (382.9) (455.6)
Net Cash flow (18.1) 1,038.2 (166.5) 20.8
Opening Cash 124.1 119.0 177.2 10.7
Closing Cash/ Cash Equivalent 119.0 177.2 10.7 31.5
Source: Company, ICICI Direct Research
Exhibit 22: Balance sheet | crore
(| Crore) FY18 FY19E FY20E FY21E
Liabilities
Equity Capital 94.8 94.8 94.8 94.8
Reserve and Surplus 2,675.1 2,134.3 2,345.5 2,602.8
Total Shareholders funds 2,769.9 2,229.1 2,440.3 2,697.6
Minority Interest - - - -
Total Debt 2,308.7 2,442.7 2,442.7 2,442.7
Deferred Tax Liability 252.1 - - -
Total Liabilities 5,331 4,672 4,883 5,140
Assets
Gross Block 613.8 687.7 712.7 737.7
Less Acc. Dep 138.0 200.3 264.9 331.7
Net Block 475.8 487.4 447.8 406.0
Goodwill on Consolidation - - - -
Capital WIP 134.5 190.0 350.0 510.0
Investments 112.5 112.8 112.8 112.8
Inventory 4,834.9 6,517.3 6,422.7 6,333.7
Sundry Debtors 327.2 335.5 467.9 551.0
Loans & Advances 3,020.5 2,919.5 3,593.4 3,958.4
Cash & Bank Balances 119.4 177.2 10.7 31.5
Total Current Assets 8,414.5 10,062.3 10,607.4 10,987.3
Creditors 3,663.5 6,040.8 6,498.0 6,734.5
Provisions 30.6 27.1 24.2 28.5
Net Current Assets 4,607.9 3,881.6 3,972.4 4,111.5
Total Assets 5,331 4,672 4,883 5,140
Source: Company, ICICI Direct Research
Exhibit 23: Key ratios
FY18 FY19E FY20E FY21E
Per Share Data (|)
EPS - Diluted 22.5 30.8 34.7 42.3
Cash EPS 28.6 37.9 42.1 50.0
Book Value 287.6 231.5 253.4 280.1
Dividend per share 8.4 11.6 13.0 15.9
Operating Ratios (%)
EBITDA / Net Sales 18.7 19.6 19.8 20.2
PAT / Net Sales 7.8 8.6 8.8 9.1
Inventory Days 634.1 691.1 617.8 517.3
Debtor Days 42.9 35.6 45.0 45.0
Return Ratios (%)
RoNW 7.8 13.3 13.7 15.1
RoCE 9.7 14.7 15.6 17.9
RoIC 9.2 14.2 15.2 18.2
Valuation Ratios (x)
EV / EBITDA 14.3 11.2 10.3 8.5
P/E (Diluted) 23.9 17.4 15.5 12.7
EV / Net Sales 2.7 2.2 2.0 1.7
Market Cap / Sales 1.9 1.5 1.4 1.2
Price to Book Value 1.8 2.3 2.1 1.9
Dividend yield 1.6 2.2 2.4 3.0
Solvency Ratios (x)
Net Debt / Equity 0.8 1.0 1.0 0.9
Debt / EBITDA 4.4 3.6 3.3 2.7
Current Ratio 2.2 1.6 1.6 1.6
Quick Ratio 0.9 0.5 0.6 0.7
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 11
ICICI Direct Research
Result Update | Sobha Ltd
Exhibit 24: ICICI Direct coverage universe (Real estate)
CMP M Cap
(|) TP(|) Rating (| Cr) FY19 FY20E FY21E FY19 FY20E FY21E FY19E FY20E FY21EFY19E FY20E FY21EFY19E FY20E FY21E
Oberoi Realty (OBEREA) 523 625 Buy 19,198 12.6 20.4 26.4 47.6 29.5 22.7 30.0 17.3 14.6 3.6 2.8 2.2 7.5 9.2 8.7
Mahindra Lifespace (MAHLIF) 381 410 Hold 1,956 19.7 23.3 27.5 19.4 16.3 13.9 32.1 63.1 56.8 0.9 0.9 0.9 4.9 5.6 6.3
Sobha (SOBDEV) 537 620 Buy 5,266 31.3 35.3 43.0 17.1 15.2 12.5 11.2 10.3 8.5 2.3 2.1 1.9 13.3 13.7 15.1
Sunteck Realty (SUNRE) 470 520 Hold 6,594 16.2 21.3 26.4 29.1 22.1 17.8 18.2 14.1 11.4 2.3 2.1 1.9 8.0 9.7 10.9
The Phoenix Mills (PHOMIL) 615 765 Buy 9,418 27.5 23.1 25.6 22.4 26.7 24.0 13.5 12.6 12.0 2.5 2.2 2.0 9.8 8.4 8.5
Brigade Enterprises (BRIENT) 234 330 Buy 3,198 10.2 17.6 18.0 23.0 13.3 13.1 11.2 8.2 8.6 1.4 1.4 1.3 6.1 10.3 9.9
P/B (x) RoE (%)
Sector / Company
EPS (|) P/E (x) EV/EBITDA (x)
Source: Company, ICICI Direct Research
ICICI Securities | Retail Research 12
ICICI Direct Research
Result Update | Sobha Ltd
RATING RATIONALE
ICICI Direct endeavors to provide objective opinions and recommendations. ICICI Direct assigns ratings to its
stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold,
Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined
as the analysts' valuation for a stock
Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%;
Sell: <-15%
Pankaj Pandey Head – Research pankaj.pandey@icicisecurities.com
ICICI Direct Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com
ICICI Securities | Retail Research 13
ICICI Direct Research
Result Update | Sobha Ltd
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