Sobha shares could be poised for a sharp re-rating as record first-half sales, a strong pipeline of new residential projects and an expected recovery in profit margins strengthen the real estate developer’s growth outlook.
Domestic brokerage house HDFC Securities sees the stock rising to ₹1,930, implying an upside of over 66% from its October 9 closing price of ₹1,161.70 hinging on the execution of planned launches, sustained demand and the expected improvement in margins.
HDFC Securities said: “Given the robust launch pipeline, strong BS, and stable CF, we maintain BUY with a TP of INR 1,930/sh.”
The brokerage expects Sobha to clock sales of more than ₹10,000 crore in FY27, supported by new launches across Bengaluru, the National Capital Region (NCR) and Pune.
In its recent research report, the brokerage said Sobha’s presales remained resilient in the September quarter despite a sequential decline following a record performance in the preceding quarter. It also highlighted the company’s strong launch pipeline, pricing strength and execution capabilities as factors supporting its growth outlook for the remainder of FY27.
The realty stock has remained under pressure across most time frames, declining over 4% in the past week, 5.5% in one month, 21% in three months and 11% in six months. Over the past year, it has fallen 19.5%, although it has gained 36% over the five-year period. The stock touched its 52-week high of ₹1,730.90 in November 2025 before slipping to a 52-week low of ₹1,131.10 in April 2026.
Sobha share price: Four reasons behind HDFC Securities’ bullish outlook
1. Strong presales and demand resilience
Sobha recorded presales worth ₹2,210 crore in Q2FY27, up 16% year-on-year but down 40% quarter-on-quarter. The sequential decline followed record presales of ₹3,660 crore in Q1FY27, supported by large project launches.
Sales area stood at 1.42 million square feet, up 2% year-on-year, while average selling prices rose 14% to ₹15,522 per square foot. For the first half of FY27, presales reached an all-time high of ₹5,860 crore, up 47% year-on-year.
HDFC Securities said: “Overall, the quarter has reinforced the demand resilience, brand-led pricing strength, and execution consistency that have underpinned SDL’s recent growth trajectory, setting a strong base heading into the rest of FY27.”
2. Strong project launch pipeline
Sobha launched two projects covering 1.03 million square feet in Calicut and Mysore during the first half of FY27. Its launches during the period reached 7.9 million square feet, with a gross development value (GDV) of ₹11,200 crore, representing around 75% of its full-year launch guidance of approximately ₹15,000 crore.
The brokerage expects new launches worth ₹6,000 crore in Q3FY27, including Crystal Meadows Phase 1 in Bengaluru, Gurugram Sector 63A Phase 2, Hyderabad and Whitefield.
3. Improving profitability
HDFC Securities expects Sobha’s margins to improve meaningfully from the second half of FY27 as revenue recognition increases from its unrecognised revenue book of ₹18,600 crore, which carries project-level EBITDA margins of more than 30%.
The brokerage also believes Sobha’s brand strength and focus on premium, end-user demand could support its performance even if investor-driven projects in Bengaluru experience a slowdown.
4. Growth across key markets
Bengaluru remained Sobha’s largest market in Q2FY27, contributing ₹1,310 crore, or approximately 60% of total presales. The National Capital Region contributed ₹590 crore, while Kerala and other cities accounted for around ₹300 crore.
HDFC Securities said: “We expect INR 60bn of new launches in Q3FY27 including crystal meadows phase 1 INR 20bn, Gurugram 63A phase 2- INR 15bn, Hyderabad INR 15bn and whitefield INR 10bn.”
HDFC Securities expects Sobha to record sales exceeding ₹10,000 crore in FY27, representing growth of around 70% year-on-year, supported by its launch pipeline in Bengaluru, the NCR and Pune, alongside pricing strength and execution.
The brokerage estimates net sales of ₹6,401 crore in FY27 and ₹7,615 crore in FY28. EBITDA is projected to rise to ₹995 crore in FY27 and ₹1,612 crore in FY28, compared with ₹310 crore in FY26.
Adjusted profit after tax is estimated at ₹674 crore in FY27 and ₹1,151 crore in FY28. Diluted earnings per share are projected to increase from ₹18.1 in FY26 to ₹63.1 in FY27 and ₹107.2 in FY28.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
