Sobha Developers (BUY): On track to achieve its FY14 guidance - AMBIT

Sobha's 1QFY14 results reflect not only the strength of its project execution but also the management's continued focus on growth (through cash deployment to accelerate execution). Sobha's revenue growth was at 37% YoY (adjusted for exceptional items) whilst its PAT growth was at 46% YoY. Net cash flow from operations after interest payment decreased to Rs0.7bn for 1QFY14 from Rs2.0bn in 4QFY13, owing to accelerated execution of ongoing projects. The company expects to launch 1.2msf of new projects in 2QFY14 and is on track to achieve its target of 4.2msf of area sold and Rs26bn worth of new sales (up 17% YoY) for FY14. We continue to view Sobha as the best play in the real estate sector. Our project-based DCF model generates a fair value of Rs482/share (71% upside). We reiterate our BUY stance.

Source : Equity Bulls

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