Motilal Oswal Reiterates 'Buy' on Sobha Limited with ₹1,720 Target Price, Citing Bengaluru Land Push

Motilal Oswal Reiterates 'Buy' on Sobha Limited, Targets ₹1,720

Motilal Oswal reiterated its 'Buy' rating on Sobha Limited with a price target of ₹1,720, indicating a 19% upside potential. The analyst note, released in early May 2026, cites the company's aggressive land acquisition strategy in Bengaluru and the strength of its near-term project pipeline as key catalysts for growth.

Land Acquisition Momentum

Sobha spent an estimated ₹11.5–11.6 billion on land acquisition in FY26 and plans to invest a similar amount in FY27, aiming to acquire about 10 million square feet of land each year. The sustained investment reflects the developer's confidence in Bengaluru's residential market and its strategy to secure prime locations for future developments.

The company maintains a total project pipeline of approximately 31.2 million square feet, including approximately 20.7 million square feet of upcoming residential developments, of which approximately 15 million square feet is concentrated in Bengaluru.

Financial Performance and Cash Position

Sobha's net cash on balance sheet improved to ₹8 billion in FY26. This improved liquidity position supports the company's ability to fund land acquisition and construction simultaneously without reliance on external financing.

In the fourth quarter of FY26, consolidated revenue increased 60% year-over-year to ₹19.9 billion, while real estate revenue rose 69% year-over-year to ₹17.9 billion. EBITDA increased 62% year-over-year to ₹1.5 billion.

Launch Pipeline and Market Traction

Sobha has outlined approximately 10 million square feet of launches for FY27 across Bengaluru, Gurugram, Hyderabad, and Pune, with additional phases planned in Kerala and Bengaluru, while Chennai and Pune launches are expected subsequently. Phase 1 of the Gurugram project (Crescent), launched in April 2026, has already achieved approximately 50% sales, indicating strong demand traction.

With construction progressing swiftly, Motilal Oswal projects an 18% compound annual growth rate in collections over FY26–28 at ₹98 billion.

Developer Context

Sobha recorded record FY26 sales of ₹8,135.9 crore, the highest in the company's 30-year history. The company has a zero-abandonment track record across 600+ projects in 30 years and 148 million square feet delivered. Sobha is India's only fully backward-integrated real estate developer, with in-house capabilities spanning concrete, glazing, interiors, woodwork, MEP, and mattresses. This operational model has historically enabled faster execution timelines and more consistent quality control versus developers reliant on external vendors.