Check Before You Invest : Sobha Ltd

Snapshot

Q.1 Which industry/sub-sector does Sobha Ltd belong to?

Sobha Ltd belongs to the Construction & Infrastructure sector, operating specifically within the Construction - Real Estate segment.

Q.2 Is Sobha Ltd a good quality company?

Sobha Ltd is a average quality company, based on a somewhat consistent 10-year financial track record.

Q.3 Is Sobha Ltd undervalued or overvalued?

Sobha Ltd appears Somewhat overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is Sobha Ltd a good buy now?

Sobha Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Revenue growth of Sobha Ltd?

Sobha Ltd revenue growth is 31.5% for FY-2025, which is above its 5-year CAGR of 1.6%, indicating faster growth.

Q.2 Return on capital employed (ROCE) of Sobha Ltd?

Sobha Ltd Return on capital employed is 7.04% for FY-2025, which is below its 5-year historical median of 8.32%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 13.5%, indicating value preservation.

Q.3 Return on Asset of Sobha Ltd?

Sobha Ltd Return on Asset is 0.76%, which is in line with its 5-year historical median of 0.76%, indicating stable asset utilization efficiency.

Q.4 Return on Equity (ROE) of Sobha Ltd?

Sobha Ltd Return on equity is 3.31% for FY-2025, which is in line with its 5-year historical median of 3.31%, indicating the business is making similar use of its shareholders capital.

Q.5 Cash conversion cycle of Sobha Ltd?

Sobha Ltd Cash conversion cycle is 831 days, below its 5-year historical median of 906 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.

	Current Level	5-year Historic Median
Asset Turnover	0.28	0.25
ROE	3.31	3.31
ROCE	7.04	8.32
Cash Conversion Cycle	831 days	906 days

Q.6 Gross Profit margin of Sobha Ltd?

Sobha Ltd Gross profit margin which is the profit after deduction of direct costs, is 5.9% for FY-2025, which is in line with its 5-year median of 5.9%, indicating stable margins.

Q.7 Operating Profit Margin of Sobha Ltd?

Sobha Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.19% for FY-2025, which is below its 5-year median of 10.22% indicating decreasing margins.

Q.8 Net Profit Margin of Sobha Ltd?

Sobha Ltd Net Profit Margin is 2.76% for FY-2025, is in line with with its 5-year median of 2.86%, indicating stable margins.

	Current Level	5-year Historic Median
Gross Profit Margin	5.9	5.9
Operating Profit Margin	7.19	10.22
Net Profit Margin	2.76	2.86

Q.9 Debt to Equity ratio of Sobha Ltd?

Sobha Ltd Debt-to-Equity ratio is 0.25, which is lower with the industry average of 0.31, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Sobha Ltd?

Sobha Ltd Debt to cash flow from operations is 6.09, which is at a unhealthy level.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Sobha Ltd?

Promoters hold 52.88% of the Sobha Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 Revenue growth of Sobha Ltd vs industry peers?

Sobha Ltd revenue CAGR is 1.60%, compared to the industry median CAGR of 4.37%, indicating stable growth and maintaining its market share.

Profit Metrics

	Current Level	5-year Industry Median
Revenue Growth	31.5	4.4
Gross Profit Growth	67.8	NAN
Operating Profit Growth	15.9	NAN
Net Profit Growth	138.3	NAN

Operating Efficiency

	Current Level	5-year Industry Median
Asset Turnover	0.28	0.14
ROE	3.31	1.52
ROCE	7.04	4.04
Cash Conversion Cycle (days)	830.84	625

Valuation & price assessment

Q.1 Stock return of Sobha Ltd over the last decade?

Over the last 9 year(s), the stock has delivered a CAGR of 17.5% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	17.5%	25.5%	48.2%	11.4%

Q.3 Valuation ratios of Sobha Ltd vs historical?

The current P/E is lower that its historical median.

Q.4 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	51.06	75.30	34.05
Price to Book	3.37	3.39	1.53
Price to Sales	2.87	3.08	5.34
EV to EBITDA	23.38	18.24	14.40

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