Track2Realty: Sobha Developers, on a consolidated basis, registered a turnover of Rs. 10.08 Billion during the first half of FY 2013-14. The Profit before Tax (PBT) stood at Rs. 1.71 Billion, and the Profit after Tax (PAT) was Rs. 1.07 Billion. On a year-on-year basis, Revenues have increased by 18%, PBT by 21% and PAT by 12% from its operations.
During Q2 of FY14, the Company registered a turnover of Rs. 5.45 Billion on a consolidated basis, up by 31%. PBT increased by 21% YoY to Rs. 863 Million, and PAT by 13% to Rs. 566 Million.
Commenting on the results, J.C. Sharma, Vice Chairman and Managing Director, Sobha Developers, said, “Despite the economy growing below 5%, increasing concerns on high interest rates, continuing inflationary pressures and the steep depreciation of Indian Rupee, our performance has been operationally better vis-à-vis the previous quarter. We have sold 1 million square feet of new space compared to 0.95 million square feet in the same quarter last year. The sales value in Q2’14 has increased to Rs. 6,323 Million from Rs. 5,274 Million in Q2’13. The average price realisation has increased to Rs. 6,304 per square feet from Rs. 5,575 per square feet a year ago.”
Sharma added, “The revenues for the quarter have increased by 31 % YoY while PBT and PAT have increased by 21% and 13% respectively. Our performance in the first half of this financial year has also been credible with revenues increasing by 18% YoY, PBT and PAT by 21% and 12% respectively.”
The unbilled revenue as of 30th September, 2013 is ` 21.97 Billion on the sales made so far, out of which we expect a minimum of ` 4.97 Billion to be recognized during the second half of the financial year. In addition to this, income from new sales will also contribute to the revenue.
“The Company has been able to consistently generate positive cash flows on a quarter on quarter basis for the last 5 quarters. We have generated ` 1.36 Billion of operational cash flows in Q2’14 and ` 2.58 Billion in H1’14,” added Mr. Sharma
On the Contractual front, the Company has bagged contractual orders worth approximately Rs. 2.20 Billion from 4 reputed clients which ensures a healthy pipeline.
New Launches in Q2 FY 2013-14
The Company’s strategic decision to diversify into new markets, backed by its robust launch pipeline, has yielded great results. “We have launched two new projects this quarter with an aggregate Total Saleable Area of 1.13 million square feet. ‘Sobha Palladian’, a 100% FDI compliant project by Sobha Highrise Ventures Private Limited – a joint venture between Sobha Developers Limited and Sun Area Property Partners, is situated on Old Airport Road, Bangalore and has a Total Saleable Area of 0.55 million square feet. ‘Sobha Bela Encosta’, our maiden project in Kozhikode, Kerala, has a Total Saleable Area of 0.58 Million square feet.” said J C Sharma.
Despite the economic challenges, Sobha Developers has recorded an increase in sales value and the sales volume, particularly in its core market – Bangalore. Bangalore market has been particularly resilient to the economic environment. The company received great response for the new launch in the city. Of the 1 million square feet of new sales in the quarter, Bangalore alone has recorded 0.67 Million square feet of sales – a 12% sequential growth and 14% growth QoQ.
“Kerala has emerged as another strong market and is growing at a fast pace. Our launches in Kerala have met with tremendous response. Continued support and increased buying from the NRI community have been driving the sales in this market. The performance of other markets was also stable,” said Mr. J C Sharma.
Growth Plans and Project Launches in the Coming Quarters
Commenting on the Company’s growth plans, J C Sharma said, “There is no denying that the headwinds prevailing in the real estate sector is perturbing. We continue to believe that our superior quality products supported by timely delivery and exemplary customer relationship management will aid in continuous and sustained growth as reflected in the H1’14 performance.”
“We have scheduled 12.38 million square feet of new launches in our existing markets in the coming three to four quarters. We also plan to enter the Kochi market in Kerala during this financial year. With the help of our existing inventory and the new launches planned in the coming quarters, we are confident that the guidance set for the current financial year will be achieved,” said Sharma.
