Sobha Developers Ltd - Red flag to cashflows; downgrade TP - Emkay

Reco: ACCUMULATE
CMP: Rs 282
Target Price: Rs 400

- SDL sells 0.92msf for Rs 6.0bn, growth of 26% YoY and achieving 23% of FY14 target. Steep fall of 72% of avg. bookings run-rate in high value NCR market is a concern

- Collections from RE at Rs 4.9bn in Q1'14 against Rs 5.3bn QoQ. OCF at Rs 1.2bn against Rs 2.6bn QoQ. Net debt for Q1 increased marginally by Rs 86mn QoQ

- SDL continues to spend on land bank with another Rs 476mn spent in Q1FY14 over Rs 2.4bn in FY13. Acquires 10 acres in Gurgaon, 5 acres in Bangalore and JD projects in Kochi

- Downgrade TP to Rs 400 and maintain Accumulate rating. There is risk to company's FY14 cashflows from lower than targeted sales booking and continue more spend for growth

Source : Equity Bulls

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