Sobha Ltd.

“Sobha owns a real operational franchise in a genuine multi-decade Indian housing upcycle, but earns only 8–11% ROIC against a cost of capital of ~12–14%, carries structural leverage that elevates permanent-impairment risk in any prolonged demand pause, and trades at 28x forward earnings with no margin of safety. The combination of narrow moat, negative structural free cash flow, promoter pledge overhang, and Bengaluru concentration makes this a fair-valued mediocre business — not a compounder — where capital is better deployed in higher-quality peers or elsewhere.”