6 November 2013

India | Real Estate | Company Update Price: `282 BUY

Sobha Developers
Cashflows firming up

| SOBHA IN

Target: `430 (Sept14)

Sobha 2QFY14 earnings report highlights sustained operational cashflow generation capability led by growing collections of `6.3/`12.5bn in 2Q/1H. It remains confident of achieving fresh sales guidance of `26bn in FY14 along with target D/E within 0.6. Net Debt remained largely unchanged at `12.6bn with outstanding real estate order book of `22bn as at Sept13. Project margins remained stable but revenue mix and one-off property salepurchase transaction led to temporary drop in margins in 2Q. Maintain BUY.

Himanshu Maheshwari himanshu.m@jmfl.com Tel: (91 22) 6630 3069

Key Data
Market cap (bn) Shares in issue (mn) Diluted share (mn) 3-mon avg daily val (mn) 52-week range Sensex/Nifty

` 30.0 / US$ 0.5

98.1 98.1

Real estate project margins intact, overall margins dip due to revenue mix: a) 2Q revenue grew 30% to `5.4bn primarily due to higher execution led billing in contract business. Higher contribution (32% of revenue) from low margin contract business (18-20% margin) and one-off property sale-purchase transaction (11% margin on c.`400mn transaction) led to overall gross margin compression of 6ppt YoY. Real estate business margins remained stable across projects as cost escalations were offset by price increases. EBITDA/Net profit grew 12%-13% to `1.4bn/0.57bn. b) Net Debt largely unchanged at `12.6bn with underlying Net D/E of 0.57; cost of debt at 12.73% (-20bps QoQ); mandatory debt repayments in 2H at `1.6bn. c) Order book stood at `22bn as at Sept13 partly due to delayed revenue recognition under new accounting rules. d) Customer collections of `6.3bn/`12.5bn led to solid operational cashflows in 2Q/1H at `1.4bn/`2.6bn. Maintains guidance supported by robust launch plans: 1H performance marks 48% achievement of FY14 sales target; management remains confident of achieving FY14 sales guidance of `26bn supported by existing inventories across locations and new project launches. Currently it has presence in 8 Indian cities and plans to enter Kochi in FY14. Launch pipeline of 12mn sq ft over next 3-4 quarters is primarily residential along with a 2.6mn sq ft commercial project. It aims to double sales volume in 5years timeframe. Maintain BUY with Sept14 target price of `430: Sobha remains our preferred pick in real estate with focused residential exposure in South India geography which is performing better than rest of India. We maintain BUY with Sept14 target price of `430. 2QFY14 Operations highlights discussed in detail in our report Growth led by core market performance dated 4th Oct 2013

` 48.1/US$ 0.8 ` 498.3/213.0

20,895/6,215 62.3

`/US$
Daily Performance
460 410 360 310 260 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Sobha Developers

30% 20% 10% 0% -10% -20% -30% -40%

So bha Develo pers

Relative to Sensex (RHS)

% Absolute Relative* * To the BSE Sensex

1M -4.0 -9.0

3M 8.0 -3.5

12M -19.3 -30.3

Shareholding Pattern
Sept13 Promoters FII DII Public / others 60.58 33.16 2.57 3.69

(%)
Sept12 60.58 32.78 3.05 3.59

E 1.Vicky

Exhibit 1: Financial Summary

Y/E March Net sales Sales growth (%) EBITDA EBITDA (%) Adjusted net profit EPS (`) EPS growth (%) ROIC (%) ROE (%) PE (x) Price/Book value (x) EV/EBITDA (x) FY11A 13,922 23.2 3,577 25.7 1,813 18.5 35.2 7.8 10.2 16.6 1.6 11.8 FY12A 14,054 1.0 4,641 33.0 2,060 21.0 13.6 8.9 10.7 14.6 1.5 9.1 FY13A 18,602 32.4 5,439 29.2 2,172 22.1 5.5 9.8 10.5 13.8 1.4 8.0 FY14E 22,200 19.3 6,726 30.3 2,937 29.9 35.2 11.7 13.2 10.2 1.3 6.2

(` mn)
FY15E 29,107 31.1 8,805 30.3 4,226 43.1 43.9 14.7 17.1 7.1 1.1 4.9
JM Financial Research is also available on: Bloomberg - JMFR <GO>, Thomson Publisher & Reuters. Please see important disclosure at the end of the report

Source: Company data, JM Financial. Note: Valuations as of 06/11/2013

JM Financial Institutional Securities Private Limited

Sobha Developers

6 November 2013

Exhibit 2. Income statement trends

2QFY12 Sales Cost of goods sold Gross Margin % EBITDA EBITDA Margin % Depreciation EBIT Other Income Interest charges PBT Taxes Effective Tax rate % Adjusted Net Profit Net Profit Margin % Adj NP (after Minorities)
Source: Company, JM Financial

(` mn)
4QFY12 5,231 2,492 52.4% 1,916 36.6% 117 1,799 13 340 1,472 497 33.8% 975 18.6% 967 1QFY13 4,332 2,239 48.3% 1,198 27.7% 140 1,058 16 377 697 247 35.4% 450 10.4% 450 2QFY13 4,148 1,987 52.1% 1,285 31.0% 141 1,144 14 443 715 214 29.9% 501 12.1% 501 3QFY13 4,298 2,062 52.0% 1,374 32.0% 153 1,221 15 439 797 271 34.0% 526 12.2% 526 4QFY13 5,867 3,271 44.2% 1,626 27.7% 160 1,466 11 446 1,031 336 32.6% 695 11.8% 695 1QFY14 4,616 2,122 54.0% 1,390 30.1% 165 1,225 14 396 843 342 41% 501 11% 501 2QFY14 5,408 2,928 45.9% 1,433 26.5% 172 1,261 37 434 864 298 34% 566 10% 566 YoY% 30% 47% -624 bps 12% -448 bps 22% 10% 164% -2% 21% 39% 456 bps 13% -161 bps 13% QoQ% 17% 38% -817 bps 3% -361 bps 4% 3% 164% 10% 2% -13% -608 bps 13% -39 bps 13%

3QFY12 3,128 1,275 59.2% 1,137 36.3% 106 1,031 22 317 736 230 31.3% 506 16.2% 494

2,943 1,215 58.7% 955 32.4% 91 864 28 341 551 197 35.8% 354 12.0% 339

Exhibit 3. Statement of Consolidated assets and liabilities

FY13 Shareholder's fund Share capital Reserves & Surplus Minority Interest Non-current liabilities Long term borrowings Deferred tax liability (net) Other Long Term Liabilities Long term provisions Current liabilities Short term borrowings Trade payables Other current liabilities Short term provisions Total equity and liabilities Non current assets Fixed assets Non current investments Deferred tax assets (net) Long term loans and advances Inventories Trade receivables Other non-current assets Current assets Current investments Inventories Trade receivables Cash & cash equivalents Short term loans and advances Other current assets Total assets
Source: Company, JM Financial

(` mn)
Change 0 567 567 0 -39 99 0 0 60 506 637 936 -795 1,284 1,911 981 21,453 22,434 102 463 842 178 14 1,497 13,506 4,580 9,171 756 28,013 52,046

1QFY14 981 20,886 21,867 102 502 743 178 14 1,437 13,000 3,943 8,235 1,551 26,729 50,135

2QFY14

981 20,386 21,367 102 526 638 178 14 1,356 13,010 4,096 7,244 1,423 25,773 48,598

3,301 0 0 4,314 0 20 152 7,787 2 19,018 1,641 670 14,358 5,122 40,811 48,598

3,302 0 0 4,357 0 0 0 7,659 6 19,984 1,795 716 15,107 4,868 42,476 50,135

3,615 0 0 4,348 0 77 154 8,194 166 20,746 2,245 690 15,021 4,984 43,852 52,046

313 0 0 -9 0 77 154 535 160 762 450 -26 -86 116 1,376 1,911

JM Financial Institutional Securities Private Limited

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Sobha Developers

6 November 2013

Exhibit 4. Fresh sales

Sales - mn sq ft 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.94 2QFY12 0.82 0.86 4QFY12 0.84 0.95 2QFY13 0.90 1.07 4QFY13 69% 69% 62% 66% 65% 62%

(mn sq ft)
Bangalore (as % of total sales) (RHS) 64% 67% 66% 69% 66% 63% 60% 0.92 1.00 2QFY14 57% 72%

Exhibit 5. Sales value and realisations (` bn & `/sq ft)

Sales Value - Rs bn 7 6 5 3,600 4 2,400 3 2 4.9 2QFY12 4.5 4.6 4QFY12 4.8 5.3 2QFY13 5.3 6.7 4QFY13 6.0 6.3 2QFY14 1,200 0 5,196 5,475 5,380 5,737 5,575 5,910 6,000 4,800 Average Seliing Price - Rs/sq ft (RHS) 6,295 6,548 6,304 7,200

Source: Company, JM Financial

Source: Company, JM Financial

5.

Exhibit 6. Sales break-up

2QFY14 - 1mn sq ft

(mn sq ft)

Exhibit 7. Sales snapshot

2QFY13 Bangalore 0.59 0.12 0.01 0.04 0.76 0.19 0.95 62% Thrissur Coimbatore Pune Existing locations New locations NCR, Chennai & Mysore Total sales volume Bangalore (% of total) 1QFY14 0.60 0.15 0.00 0.02 0.78 0.15 0.92 66% 2QFY14 0.67 0.10 0.02 0.01 0.81 0.20 1.00 67%

(mn sq ft)
YoY% 14% -13% 49% -67% 6% 4% 6% QoQ% 12% -31% NA -45% 4% 35% 9%

Mysore Chennai 2.2% 8.7% NCR 3.1% Pune 1.3% Coimbatore 1.6% Thrissur 10.3%

Kozhikode 5.6%

New locations driving growth by conrtributing 20% of 2QFY14 sales

Bangalore 67.3%

Strong Bangalore micro-market sales offset weakness in other micro-markets

Source: Company, JM Financial

Source: Company, JM Financial

7.

Exhibit 8. Sales volume trends

Sales Volume Bangalore Thrissur Coimbatore Pune NCR Chennai Mysore Kozhikode Total YoY% QoQ% 3QFY11 564 58 26 56 0 0 0 0 705 -12% -5% 4QFY11 543 60 39 14 0 0 0 0 656 3% -7% 1QFY12 477 58 44 28 0 0 59 0 666 -1% 1% 2QFY12 644 102 19 47 107 0 17 0 936 26% 41% 3QFY12 568 83 21 24 106 0 17 0 819 16% -13% 4QFY12 570 61 7 31 109 85 0 0 863 32% 5% 1QFY13 520 44 26 31 136 72 7 0 836 26% -3% 2QFY13 590 118 11 39 138 42 8 0 946 1% 13% 3QFY13 591 88 20 23 103 67 10 0 903 10% -5% 4QFY13 683 93 7 45 133 106 4 0 1,071 24% 19%

(in 000 sq ft)

1QFY14 603 149 0 23 36 100 9 0 921 10% -14% 2QFY14 675 103 16 13 31 87 22 57 1,003 6% 9%

Source: Company, JM Financial

JM Financial Institutional Securities Private Limited

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6 November 2013

Exhibit 9. Completed projects (mn sq ft)

Completed projects - mn sq ft Real Estate projects 60 50 40 30 20 10 0 2QFY13 3QFY13 4QFY13 1QFY14 2QFY14 20.6 20.8 21.3 21.3 21.8 28.2 28.5 48.8 49.3 50.6 Contracts 50.7 52.0

Exhibit 10. Ongoing projects (mn sq ft)

Ongoing projects - mn sq ft Contracts 35 30 27.3 9.9 27.5 10.1 Real Estate projects 30.3 30.5

Exhibit 11. Forthcoming projects (mn sq ft)

Forthcoming projects - mn sq ft 15 12 9 6 8.7 12.0 Contracts 12.5 Real Estate projects 12.0 11.7 12.4

29.0 10.7

29.3

29.4

30.2

25 20 15 10 5 0

11.4

11.1

12.5 8.7

11.7

12.4

17.4

17.4

18.4

18.9

19.4

3 0

2QFY13

3QFY13

4QFY13

1QFY14

2QFY14

2QFY13

3QFY13

4QFY13

1QFY14

2QFY14

Source: Company, JM Financial

Source: Company, JM Financial

10.

Source: Company, JM Financial

11. Exhibit 12. Quarterly deliveries

Deliveries (incl contracts) - mn sq ft 2.5 2.0 2.0 1.5 1.0 0.5 0.1 0.0 2QFY12 4QFY12 2QFY13 4QFY13 2QFY14
Source: Company, JM Financial Source: Company, JM Financial

(mn sq ft)

Exhibit 13. Unbilled value of Contract business (` bn)

Unbilled value of contract business- Rs bn 10 9 9.8

1.5 1.2 0.8 0.5

8.2

1.3

1.3

8 7 6.1 6 6.0 5.9 6.2 5.3 2QFY12 4QFY12 2QFY13 4QFY13

7.3

7.3

0.1

5 2QFY14

13.
(` bn)

Exhibit 14. Land Bank

Land Bank (mn sq ft) 230 227 224 94 221 218 215 212 221 2QFY12 219 217 4QFY12 215 218 2QFY13 220 227 4QFY13 227 89 90 87 86 91 88 86

(mn sq ft)
Book Value - Rs/sq ft (RHS) 110 105 100 95 87 90 85 227 2QFY14 80

Exhibit 15. Book value of land bank

Amount outstanding - Rs bn 25 20 15 10 5 0 -1.4 -5 2QFY12 4QFY12 2QFY13 -1.2 -1.2 -1.1 -1.2 -1.4 -2.0 4QFY13 -2.0 20.9 19.5 18.9 18.4 19.6 20.1 20.0 19.6 Book Value - Rs bn

19.7

-2.2 2QFY14

Source: Company, JM Financial

Source: Company, JM Financial

15.

JM Financial Institutional Securities Private Limited

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6 November 2013

Exhibit 16. Revenue trends

Revenue - Rs bn 6.0 5.5 5.0 4.5 4.0 3.5 3.0 2.5 3.3 2QFY12 3.1 5.2 4QFY12 4.3 4.2 2QFY13 4.3 5.9 4QFY13 4.6 5.4 2QFY14 71% 72% 56% 75% Real Estate (as % of total) 74% 76% 75% 68%

(%)

Exhibit 17. EBITDA Margin

40% 37% 36% 32% 28% 32% 30% 28% 26% EBITDA Margin %

(%)

80%
35%

70%
30%

31%

60% 49% 50%

20% 25%

40%
15%

30%

2QFY12

4QFY12

2QFY13

4QFY13

2QFY14

Source: Company, JM Financial

Source: Company, JM Financial

17.
(` bn)
0.8

Exhibit 18. Net Debt

Net Debt - Rs bn 15 Rolling 4-qtr avg debt

(` bn)

Exhibit 19. Networth and D/E trends

Net Debt - Rs bn 16 Net D/E (RHS)

14

0.71 0.7 0.65

13
12

0.62 0.57 0.58

0.62 0.57 0.56 0.57 0.6

11
10

13.6 2QFY12

12.7

11.3 4QFY12

11.8

12.9 2QFY13

13.2

12.2 4QFY13

12.3

12.7 2QFY14
8

13.6 2QFY12

12.7

11.3 4QFY12

11.8

12.9 2QFY13

13.2

12.2 4QFY13

12.3

12.7 2QFY14

0.5

Source: Company, JM Financial

Source: Company, JM Financial

19.
(` bn)

Exhibit 20. Receivables

8.0 7.0 5.7 5.9 Debtors (incl unbilled rev) - Rs bn

(` bn)
7.5 6.9 6.7

Exhibit 21. Loans and advances

20 18.9 18.3 18.1 Loans & Advances - Rs bn 19.5 19.1 18.7 18.9 18.7

19.4

19

6.0 5.0 4.2 4.0 3.9 3.4 3.4

18

17

16

3.0 2QFY12 4QFY12 2QFY13 4QFY13 2QFY14

15 2QFY12 4QFY12 2QFY13 4QFY13 2QFY14

Source: Company, JM Financial; Note: Incl Trade receivables and other current assets

Source: Company, JM Financial

21.

JM Financial Institutional Securities Private Limited

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Company Background

Sobha is a dominant real estate player in South India with land bank of c.220mn sq ft. It is now emerging as a pan-India developer - the foray into Gurgaon, Mysore and Chennai in FY12 has increased its presence to 7 Indian cities through real estate projects and over 20 cities through contract business. It is primarily a residential developer with development history of c.56mn sq ft (>300 projects) as at Mar13. It currently has c.36mn sq ft of ongoing projects (real estate and contract business) and plans to launch 12mn sq ft over coming quarters. It has a contract division catering to inhouse project development requirements as well as third party projects on a cost-plus margin basis. (` bn)
FY12A 10.3 2.3 1.4 0.1 14.1 FY13A 14.1 3.0 1.6 0.1 18.6 FY14E 17.3 3.3 1.6 0.1 22.2 FY15E 23.8 3.6 1.7 0.1 29.1 FY11A Real Estate Income Contractual Income Manufacturing Income Excise Total Revenue 10.7 2.3 0.9 0.0 13.9

Exhibit 22. Revenue Variables

Source: JM Financial

Investment Rationale

New cities with stable Bangalore market to fuel growth: Predominantly it used to be a Bangalore focused player but with foray into 3 new cities in FY12 and plans to enter markets of Kochi, Kozhikode, Hyderabad, Noida and Ghaziabad, it will soon establish itself as a pan-India developer. New cities with stable Bangalore market to fuel growth for the company. Expect cash surplus of over `38bn from projects under execution: Sobha can generate c.`38bn cash surplus from c.18mn sq ft project under execution in real estate segment (Sobhas economic interest 16mn sq ft over 40% presold as at Mar13). Diversified low-cost land bank: Sobha has a diversified land bank of c.220m sf in 8 Indian cities. Land bank is highly concentrated in South India with Bangalore, Cochin, Chennai and Hosur cumulatively forming >90% of the total land bank. Average book value of `88/sq ft as at Mar13.

Key Risks

High dependence on Bangalore - a key market for Sobha: Sobha has diversified itself with projects across 7 Indian cities and is aiming entry into couple of new cities. However, Bangalore remains a key micro market with dominant c.63% volume share in total sales by company (based on FY13 operations). Input cost pressure remains a challenge: Input cost pressures were witnessed in recent past as increase in realisations overtime failed to translate into margin expansion. Rise in prices of material, labour has pushed up total construction costs offsetting price increase benefits. Venturing into new geographies: India real estate is a localized play and entry into new geographies is a challenging task for a new player. Gaining market share from existing established players can take more than anticipated time and result in delayed monetisation of projects.

JM Financial Institutional Securities Private Limited

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Sobha Developers

6 November 2013

Financial Tables (Consolidated)

Profit & Loss
Y/E March Net sales (Net of excise) Growth (%) Other operational income Raw material (or COGS) Personnel cost Other expenses (or SG&A) EBITDA EBITDA (%) Growth (%) Other non-op. income Depreciation and amort. EBIT Add: Net interest income Pre tax profit Taxes Add: Extraordinary items Less: Minority interest Reported net profit Adjusted net profit Margin (%) Diluted share cap. (mn) Diluted EPS (`) Growth (%) Total Dividend + Tax FY11A 13,922 23.2 0 7,777 1,035 1,532 3,577 25.7 45.2 0 278 3,299 -808 2,491 669 0 33 1,790 1,813 13.0 98 18.5 35.2 343 FY12A 14,054 1.0 0 4,447 1,267 3,699 4,641 33.0 29.7 0 388 4,253 -1,101 3,152 1,077 0 41 2,035 2,060 14.7 98 21.0 13.6 570 FY13A 18,602 32.4 0 9,103 1,635 2,425 5,439 29.2 17.2 0 594 4,846 -1,650 3,196 1,068 0 -1 2,129 2,172 11.7 98 22.1 5.5 803 FY14E 22,200 19.3 0 11,211 1,717 2,546 6,726 30.3 23.6 0 633 6,092 -1,711 4,381 1,445 0 -1 2,937 2,937 13.2 98 29.9 35.2 1,028

(` mn)
FY15E 29,107 31.1 0 15,825 1,803 2,673 8,805 30.3 30.9 0 668 8,137 -1,833 6,304 2,080 0 -1 4,226 4,226 14.5 98 43.1 43.9 1,232

Balance Sheet
Y/E March Share capital Other capital Reserves and surplus Networth Total loans Minority interest Sources of funds Intangible assets Fixed assets Less: Depn. and amort. Net block Capital WIP Investments Def tax assets/- liability Current assets Inventories Sundry debtors Cash & bank balances Other current assets Loans & advances Current liabilities & prov. Current liabilities Provisions and others Net current assets Others (net) Application of funds FY11A 981 0 17,527 18,508 12,593 324 31,425 0 3,148 1,775 1,373 647 37 74 36,816 10,685 1,081 230 3,229 21,592 7,521 6,580 942 29,295 0 31,425 FY12A 981 0 19,017 19,998 12,585 355 32,938 42 4,956 2,158 2,840 13 0 -330 39,520 16,759 1,180 588 2,724 18,268 9,104 7,718 1,386 30,416 0 32,938 FY13A 981 0 20,386 21,366 13,965 102 35,433 132 5,344 2,176 3,301 0 2 -638 45,294 19,018 1,662 670 5,274 18,671 12,526 11,088 1,438 32,769 0 35,433 FY14E 981 0 22,295 23,276 13,680 100 37,056 132 5,644 2,809 2,967 0 2 -638 47,304 20,041 1,603 1,885 5,274 18,500 12,579 11,142 1,438 34,725 0 37,056

(` mn)
FY15E 981 0 25,289 26,270 13,446 99 39,815 132 5,944 3,477 2,599 0 2 -638 49,568 21,830 1,779 471 5,274 20,213 11,716 10,278 1,438 37,852 0 39,815

Source: Company, JM Financial

Source: Company, JM Financial

Cash flow statement

Y/E March Reported net profit Depreciation and amort. -Inc/dec in working cap. Others Cash from operations (a) -Inc/dec in investments Capex Others Cash flow from inv. (b) Inc/-dec in capital Dividend+Tax thereon Inc/-dec in loans Others Financial cash flow ( c ) Inc/-dec in cash (a+b+c) Opening cash balance Closing cash balance FY11A 1,790 262 6,160 33 8,244 -10 -220 -6,120 -6,351 23 -343 -2,147 -22 -2,489 -596 826 230 FY12A 2,035 383 -5,784 31 -3,335 37 -1,216 5,021 3,841 25 -570 -8 404 -149 358 230 588 FY13A 2,129 17 -2,296 -254 -404 -2 -466 26 -442 43 -803 1,380 308 927 82 588 670 FY14E 2,937 633 -1,053 -1 2,516 0 -300 313 13 0 -1,028 -285 0 -1,313 1,216 670 1,885

(` mn)
FY15E 4,226 668 -1,930 -1 2,963 0 -300 -2,612 -2,912 0 -1,232 -234 0 -1,466 -1,414 1,885 471

Key Ratios
Y/E March BV/Share (`) ROIC (%) ROE (%) Net Debt/equity ratio (x) Valuation ratios (x) PER PBV EV/EBITDA EV/Sales Turnover ratios (no.) Debtor days Inventory days Creditor days 28 280 153 31 435 300 33 373 164 26 330 131 22 274 93 16.6 1.6 11.8 3.0 14.6 1.5 9.1 3.0 13.8 1.4 8.0 2.3 10.2 1.3 6.2 1.9 7.1 1.1 4.9 1.5 FY11A 188.7 7.8 10.2 0.7 FY12A 203.8 8.9 10.7 0.6 FY13A 217.8 9.8 10.5 0.6 FY14E 237.3 11.7 13.2 0.5 FY15E 267.8 14.7 17.1 0.5

Source: Company, JM Financial

Source: Company, JM Financial

JM Financial Institutional Securities Private Limited

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Sobha Developers
History of earnings estimates and target price
Date 23-Apr-12 8-May-12 26-Jun-12 8-Aug-12 2-Nov-12 2-Apr-13 10-May-13 14-Jun-13 12-Aug-13 12-Sep-13 FY14E EPS (`) 37.0 37.2 34.9 33.2 35.5 27.8 30.5 30.7 29.9 29.9 0.5 -6.2 -4.9 6.9 -21.7 9.7 0.7 -2.6 0.0 49.4 45.7 43.4 44.9 43.8 43.8 -7.5 -5.0 3.5 -2.4 0.0 % Chg. FY15E EPS (`) % Chg. Target Price 440 440 440 440 450 475 475 475 430 430 Target Date Mar-13 Mar-13 Mar-13 Mar-13 Sep-13 Mar-14 Mar-14 Mar-14 Mar-14 Mar-14 0.0 0.0 0.0 2.3 5.6 0.0 0.0 -9.5 0.0 % Chg.

6 November 2013
Recommendation history
500 450 400 350 300 250 200 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 BB B B B B

Sobha Developers
B B

B B

Target P rice

So bha Developers

JM Financial Institutional Securities Private Limited

Member, BSE Limited and National Stock Exchange of India Limited SEBI Registration Nos.: BSE - INB011296630 & INF011296630, NSE - INB231296634 & INF231296634 Registered Office: 7th Floor, Cnergy, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India Corporate Office: 7th Floor, Cnergy, Appasaheb Marathe Marg, Prabhadevi, Mumbai 400 025, India Board: +9122 6630 3030 | Fax: +91 22 6747 1825 | Email: jmfinancial.research@jmfl.com | www.jmfl.com Analyst Certification
The research analysts, with respect to each issuer and its securities covered by them in this research report, certify that: All of the views expressed in this research report accurately reflect his or her or their personal views about all of the issuers and their securities; and No part of his or her or their compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed in this research report.

Analyst(s) holding in the Stock: (Nil) Disclosures

This research report has been prepared by JM Financial Institutional Securities Private Limited (JM Financial Institutional Securities) to provide information about the company(ies) and sector(s), if any, covered in the report and may be distributed by it and/or its affiliated company(ies) solely for the purpose of information of the select recipient of this report. This report and/or any part thereof, may not be duplicated in any form and/or reproduced or redistributed without the prior written consent of JM Financial Institutional Securities. This report has been prepared independent of the companies covered herein. JM Financial Institutional Securities and its affiliated companies are part of a multi-service, integrated investment banking, investment management, brokerage and financing group. JM Financial Institutional Securities and/or its affiliated company(ies) might have provided or may provide services in respect of managing offerings of securities, corporate finance, investment banking, mergers & acquisitions, financing or any other advisory services to the company(ies) covered herein. JM Financial Institutional Securities and/or its affiliated company(ies) might have received or may receive compensation from the company(ies) mentioned in this report for rendering any of the above services. Research analysts and sales persons of JM Financial Institutional Securities may provide important inputs to its affiliated company(ies) associated with it. While reasonable care has been taken in the preparation of this report, it does not purport to be a complete description of the securities, markets or developments referred to herein, and JM Financial Institutional Securities does not warrant its accuracy or completeness. JM Financial Institutional Securities may not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. This report is provided for information only and is not intended to be and must not alone be taken as the basis for an investment decision. The investment discussed or views expressed herein may not be suitable for all investors. The user assumes the entire risk of any use made of this information. The information contained herein may be changed without notice and JM Financial Institutional Securities reserves the right to make modifications and alterations to this statement as they may deem fit from time to time. JM Financial Institutional Securities and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. This report is neither an offer nor solicitation of an offer to buy and/or sell any securities mentioned herein and/or not an official confirmation of any transaction. This report is not directed or intended for distribution to, or use by any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject JM Financial Institutional Securities and/or its affiliated company(ies) to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession this report may come, are required to inform themselves of and to observe such restrictions. Additional disclosure only for U.S. persons: This research report is distributed in the United States by Enclave Capital LLC (Enclave Capital), a U.S. registered broker dealer, only to major U.S. institutional investors, as defined under Rule 15a-6 promulgated under the U.S. Securities Exchange Act of 1934 (the Exchange Act), as amended, and as interpreted by the staff of the U.S. Securities and Exchange Commission (SEC). This research report is not intended for use by any person or entity that is not a major U.S institutional investor. If you have received a copy of this research report and are not a major U.S institutional investor, you are instructed not to read, rely on or reproduce the contents hereof, and to destroy this research or return it to JM Financial Institutional Securities or to Enclave Capital. This research report is a product of JM Financial Institutional Securities, which is the employer of the research analyst(s) responsible for the content of the research report. The research analyst(s) preparing the research report is/are resident outside the United States and are not associated persons or employees of any U.S. registered broker-dealer. Therefore the analyst(s) are not be subject to supervision by a U.S. broker-dealer, or otherwise is/are not required to satisfy the regulatory licensing requirements of FINRA and are not be subject to Rule 2711 of the Financial Industry Regulatory Authority (FINRA) or to Regulation AC adopted by the SEC which among other things, restrict communications with a subject company, public appearances and personal trading in securities by a research analyst. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order to conduct certain business with Major Institutional Investors, JM Financial Institutional Securities has entered into an agreement with a U.S. registered broker-dealer, Enclave Capital. Transactions in securities discussed in this research report should be effected through Enclave Capital.

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