Sobha shares rose more than 9% in early trade on May 30 as the company reported strong results for the quarter that ended March 2023.

Buoyed by healthy revenue growth, Sobha reported a massive 242% year-on-year rise in consolidated profit to Rs 48.6 crore in Q3FY23 despite lower operating margins.

Operating income surged 70.3% to Rs 1,210 crore year-on-year, with continued sales growth, record collections and good customer deliveries.

Board recommends a dividend of Rs 3 per share for FY23.

Jagadish Nangineni, Managing Director of Sobha, said: “FY22-23 has been an outstanding year for Sobha, with the combined efforts of the team and contributions from our stakeholders achieving new milestones in sales and cash flow.”

“We have a strong platform for further growth, improving our offerings to customers and maintaining a healthy financial structure. With a solid financial and operating model, complemented by a product portfolio that meets customer needs, we are well-positioned to capitalise on an optimistic socio-economic environment that India presents today,” he added.

In FY23 real estate revenue rose 33% YoY to Rs 52.82 billion and FY23 net cash flow was the highest at Rs 6.97 billion, up 36% YoY. Sales rose 34% YoY to Rs 51.98 billion in FY23.

Brokerage Motilal Oswal reiterated its “buy” rating on the stock. It has moved forward its estimates and also factored in marginal debt repayment, leading to an increase of Rs 750 in the target price.

Research firm Sharekhan maintains a positive view on the stock, seeing a 25% upside potential.

Sobha was quoted at Rs 540.85 at 9:18 am, up Rs 33.35 or 6.57% on the BSE.