SOBHA LTD

BSE Code ........ 532784 | Tar­get 1 .... ₹537 | Tar­get 2 .... ₹555 I CMP : ₹470

Flash News Investment - - DIWALI RECOMENDATION -

De­spite stricter RERA reg­u­la­tions and sub­dued de­mand for re­alty, Sobha achieved new sales vol­umes of 8.6 lakh sq.ft. amount­ing to Rs 675 crore with av­er­age re­al­i­sa­tion of Rs 784/sq.ft. dur­ing Q2FY18. The c om­pany posted 15.6% sales growth in Q2FY18, while it re­ported an­nual rev­enue and PAT growth of 14.7% and 16.4%, re­spec­tively, in FY17. Go­ing for­ward, Prad­han Mantri Awas Yo­jana, cou­pled with de­cel­er­at­ing in­fla­tion and re­duc­ing in­ter­est rates would help the en­tire sec­tor and the com­pany to in­crease its mar­ket share. The stock, af­ter reg­is­ter­ing a high of Rs 583.80 in the month of June 2014, en­tered into a cor­rec­tive phase and made a low of around Rs 230, and there­after, it wit­nessed a pull­back rally which was short­lived. How­ever, the stock formed a strong base around the lev­els of Rs 216-230 and en­tered into an up trend, but it failed to close above the level of Rs 430 on a weekly ba­sis. At present, the stock has wit­nessed break­out of downward slop­ing trend and ad­di­tion­ally, as on week ended Oc­to­ber 13, 2017, the stock had formed big­gest bull can­dle since May 2017 along with ro­bust vol­umes, which sug­gests ac­tive par­tic­i­pa­tion by the bulls.

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