In a remarkable upswing, Sobha Ltd's shares soared nearly 20% to a historic peak of Rs 1,335 during morning trading on the Bombay Stock Exchange (BSE). This surge follows an 11% rally in the previous session, aligning with an overall bullish trend in realty stocks today.
The impetus for Sobha's stock surge can be attributed to Motilal Oswal Financial Services, which identified the real estate firm as a top pick for 2024. Endorsing a buy rating on the stock, Motilal Oswal set a target price of Rs 1,400, signifying a substantial 25% potential upside.
Motilal Oswal's optimism is rooted in Sobha Ltd's strategic focus on unlocking its extensive land reserves and exploring external growth opportunities, leveraging its robust balance sheet. The brokerage firm anticipates that Sobha's growth trajectory will outperform its peers, citing the company's renewed emphasis on expanding and capitalizing on its substantial land bank.
The brokerage firm specifically foresees project launches on expansive land parcels in Bengaluru and Tamil Nadu, projecting a positive re-evaluation of Sobha's current land valuation. Motilal Oswal underscored the real estate player's improved profitability and the potential monetization of significant land holdings in Bengaluru as factors likely to contribute to a positive re-rating in its implied land valuation.
Over the past year, Sobha's share price has more than doubled, surpassing the 92% rise in the BSE Realty index during the same period. In the last six months alone, Sobha's shares exhibited robust strength, witnessing a remarkable 140% surge, while the BSE Realty index increased by 56% during the corresponding timeframe. As Sobha continues to ride this upward trajectory, market observers are keenly monitoring its strategic moves and growth initiatives.
