Sobha shares record 28% gains this week. Here's what triggered the rally
Sobha jumped over 28% this week scaling a fresh 52-week high of Rs 1,343.35 in the process. Over the five trading sessions, the stock witnessed declines on two occasions as investors booked profit following strong upticks.
On Friday, Sobha shares closed at Rs 1,269 on the NSE, down by Rs 26.25 2.03%.
A ‘buy’ call by brokerage Motilal Oswal along with buying action in the realty stocks triggered a sharp rally in Sobha shares this week.
The brokerage in a review note highlighted the company's focus on sustainable growth with healthy cash flows and profitability.
«After underperforming its listed peers on pre-sales growth over FY21-23, we believe Sobha is set to outperform in terms of growth given its focus on unlocking its vast land reserve and exploring external growth opportunities through its healthy balance sheet,» the brokerage note said.
The outperformance is also expected to be driven by improvements in profitability and further visibility in the monetisation of some of its large land parcels in Bengaluru that could lead to a re-rating in its implied land valuation, the Motilal Oswal note said.
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The realty firm also reported a 37% increase in sales bookings at Rs 1,951.6 crore in the third quarter of this financial year, mainly on the back of strong housing demand in Bengaluru.
