Shobha Ltd Shares Surge on 242% Net Profit Growth

Thanks to substantial gains in metals and auto sector stocks, Indian benchmark indices concluded the highly volatile session considerably higher. BSE Realty continued its strong uptrend, gaining more than 1%, led by around a 5% rally in shares of Indiabulls Real Estate Ltd. 

Shares of Sobha Ltd surged during the opening trades of the session, reaching an intraday high of Rs 589.95 per share on the BSE, making it one of the top gainers in the small-cap pack. Following the announcement of outstanding quarter performance, shares of the company have soared by about 12% in just the last five trading sessions! 

Taking into account the company’s quarterly performance, on a consolidated basis, it reported an outstanding growth of 70.34% from Rs 710.30 crore registered in Q4FY22, recording total revenue of Rs 1,209.90 crore in Q4FY23. When comparing the net profit for the fourth quarter of FY23 to the same quarter last year, it skyrocketed 242.25% from Rs 14.20 crore to Rs 48.60 crore.   

Sobha Limited, incorporated in 1995, is a real estate developer specializing in the construction and operation of townships, housing projects, commercial properties, and other associated activities. The company completed numerous projects in Bangalore, built landmark developments in Kerala, and has expanded into Delhi, Chennai, Coimbatore, Mysore, Pune and other cities.  

It has successfully launched nine residential projects with a total saleable area of 3.96 mn sft and started operations in two new cities including Trivandrum and Hyderabad. Furthermore, the company launched three new residential projects: Sobha Waterfront, Sobha Galera, and Sobha Oakshire, two of which are in Bangalore and the third is the company’s first project in Hyderabad.  

Significant promoter holding, stable financials and the ability to distribute dividends in every financial year are some of the company’s strengths that have attracted investors whereas the high PE ratio is reason to worry. 

Keep a close eye on this stock for the upcoming sessions!