⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SOBHA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.2
| Stock Code | SOBHA | Market Cap | 13,832 Cr. | Current Price | 1,294 ₹ | High / Low | 1,732 ₹ |
| Stock P/E | 60.0 | Book Value | 424 ₹ | Dividend Yield | 0.23 % | ROCE | 6.98 % |
| ROE | 3.31 % | Face Value | 10.0 ₹ | DMA 50 | 1,419 ₹ | DMA 200 | 1,472 ₹ |
| Chg in FII Hold | -0.15 % | Chg in DII Hold | -0.26 % | PAT Qtr | 30.7 Cr. | PAT Prev Qtr | 104 Cr. |
| RSI | 38.2 | MACD | -50.5 | Volume | 99,981 | Avg Vol 1Wk | 1,58,901 |
| Low price | 1,075 ₹ | High price | 1,732 ₹ | PEG Ratio | -7.60 | Debt to equity | 0.23 |
| 52w Index | 33.2 % | Qtr Profit Var | 11.4 % | EPS | 21.6 ₹ | Industry PE | 25.5 |
📊 Financial Overview
- Revenue & Profit Growth: Quarterly PAT fell sharply from ₹104 Cr. to ₹30.7 Cr., showing weak momentum.
- Margins: ROE at 3.31% and ROCE at 6.98% → poor efficiency.
- Debt: Debt-to-equity ratio of 0.23 → low leverage, balance sheet stable.
- Cash Flow: Stable but pressured by declining profits.
- Return Metrics: EPS at ₹21.6, modest earnings power.
💹 Valuation Indicators
- P/E Ratio: 60.0 vs Industry PE of 25.5 → highly overvalued.
- P/B Ratio: Price ₹1,294 / Book Value ₹424 ≈ 3.05.
- PEG Ratio: -7.60 → negative, reflecting weak growth outlook.
- Intrinsic Value: Current valuation stretched, limited margin of safety.
🏢 Business Model & Competitive Advantage
- Operates in real estate and property development.
- Competitive advantage lies in brand recognition and premium projects.
- Challenges include cyclical demand, margin pressures, and weak profitability.
📈 Entry Zone Recommendation
- Technicals: RSI at 38.2 (oversold), MACD negative, price below 50DMA (1,419) and 200DMA (1,472).
- Entry Zone: Attractive accumulation near ₹1,200–1,250 for long-term investors.
- Holding Guidance: Suitable for patient investors; long-term holding depends on earnings recovery and demand stability.
✅ Positive
- Low debt-to-equity ratio (0.23).
- Strong brand presence in real estate sector.
- RSI oversold, potential for technical rebound.
⚠️ Limitation
- Quarterly PAT declined significantly.
- Weak ROE (3.31%) and ROCE (6.98%).
- High P/E (60.0) compared to industry average (25.5).
- Dividend yield low at 0.23%.
📉 Company Negative News
- PAT dropped from ₹104 Cr. to ₹30.7 Cr.
- FII holdings decreased (-0.15%).
- DII holdings decreased (-0.26%).
- Stock corrected from ₹1,732 to ₹1,294.
📈 Company Positive News
- Quarterly profit variation shows 11.4% improvement YoY despite sequential decline.
- RSI oversold may attract value investors.
- Low debt enhances financial stability.
🌐 Industry
- Real estate industry is cyclical but benefits from urbanization and housing demand.
- Industry PE at 25.5 indicates sector trades at lower valuations compared to SOBHA.
- Government infrastructure push supports long-term opportunities.
🔎 Conclusion
- SOBHA shows brand strength and low debt but suffers from weak profitability and high valuation.
- Valuations are stretched, limiting near-term upside.
- Best considered for long-term investors with entry near ₹1,200–1,250; holding depends on earnings recovery and demand growth.