Mehabe score: 3 G Factor: 2 Piotski Score: 5 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 5.
Description
Sobha is a leading real estate developer engaged in the business of construction, development, sale, management and operation of all or any part of townships, housing projects, commercial premises and other related activities.Site:SOBHA
Market Cap:
Rs 4,759 cr
Price:
503.0
Trading pe:
50.0x
Book-value:
252/share
Div yield:
1.39 %
Earning yield:
9.80%
Face-value:
10.0/share
52week high:
548.50
52week low:
200.25
Technical Analysis
Stock trades at 503.0, above its 50dma 485.14. It also trades above its 200dma 416.84. The stock remains bullish on techicals
The 52 week high is at 548.50 and the 52week low is at 200.25
Price Chart
P/E Chart
Sales and Margin
Strengths
– has been maintaining a healthy dividend payout of 25.51%
Weakness
– has low interest coverage ratio.
– has a low return on equity of 10.54% for last 3 years.
-‘s cost of borrowing seems high
-Promoter holding has decreased over last 3 years: -3.95%
Competition
– The industry trades at a mean P/E of 43.2x. Phoenix Mills trades at the industry’s max P/E of 268.24x. SOBHA trades at a P/E of 50.0x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 7.0. SOBHA has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 9.2%. The max 1- month return was given by NBCC: a return of 17.58 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 553.0 cr compared to Rs 910.0 cr for period ended Mar 2020, a fall of 39.2%
Operating Profits reported at Rs 150.0 cr for period ended Mar 2021 vis-vis 254.0 for period ended Mar 2020 .
Operating Margins contracted -78.7 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 1.89 compared to Rs 2.28 for previous quarter ended Dec 2020 and Rs 5.35 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2110.0 cr for period ended Mar 2021 vis-vis sales of Rs 3754.0 cr for the period ended Mar 2020, a fall of 77.9%. The 3 year sales cagr stood at -8.8%.
Operating margins expanded to 32.0% for period ended Mar 2021 vis-vis 30.0% for period ended Mar 2020, expansion of 200.0 bps.
Net Profit reported at Rs 62.0 cr for period ended Mar 2021 vis-vis sales of Rs 282.0 cr for the period ended Mar 2020, falling 354.8%.
Company reported a poor Net Profit CAGR of -34.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 12.0% compared to 11.0% over the last 3 Years. – The stock has given a return of 116% on a 1 Year basis vis-vis a return of 1% over the last 3 Years. – The compounded sales growth on a TTM bassis is -42% vis-vis a compounded sales growth of 19% over the last 3 Years. – The compounded profit growth on a TTM basis is -72% vis-vis a compounded profit growth of 21% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has risen for the period ended Mar 2021. The Mar 2021 fii holding stood at 18.08% vis-vis 15.97% for Dec 2020 – Public shareholding has remained largely constant. The Mar 2021 public holding stood at 17.47% vis-vis 18.71% for Dec 2020
Conclusion
– has been maintaining a healthy dividend payout of 25.51% – has low interest coverage ratio.
– has a low return on equity of 10.54% for last 3 years.
-‘s cost of borrowing seems high
-Promoter holding has decreased over last 3 years: -3.95%
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 485.14 and is trading at 503.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
