Sobha Q2 Net Profit Rises 5.12%; 15 Million sq ft of Projects Lined Up – Business Line – 13-Nov-2014

November 13, 2014 - Uncategorized

New sales and higher realisation per square feet have boosted Sobha Ltd’s profit for the second quarter of 2014-15. The company has posted a 5.12 per cent rise in consolidated profit at Rs. 59.5 crore for the September quarter, compared withRs. 56.6 crore in the same period last year.

Total income rose 24 per cent to Rs. 669.5 crore against Rs. 540 crore in the corresponding period last year. Earnings per share stood at Rs. 6.07 during the quarter, up from Rs. 5.77 last year.

Debt increase

“During the second quarter, the company achieved new sales of 833,991 square feet valued at Rs. 559 crore with an average realisation of Rs.6,703 per square feet. We also collected Rs. 725 crore and generated net operational cash flow of Rs. 92.8 crore,” said JC Sharma, Vice-Chairman and Managing Director. The current debt-equity ratio is 0.70 with a net debt of Rs. 1,678 crore.

The increase in debt is mainly on account of investment in new projects in Kochi and Pune, dividend pay-out and capital expenditure.

Growth prospects

The unbilled revenue as of September 30 was Rs. 2,210 crore on the sales made so far, out of which a minimum of Rs. 708 crore is expected to be recognised during the second-half of the current financial year. Sharma said the company has a healthy pipeline of about 15 million square feet of project launches planned in the next few quarters in its existing geographies.

In the last 20 years, Sobha has completed and delivered 95 real estate and 253 contractual projects, totalling 65.83 million square feet of area.

“We are probably the only player in the real estate arena to deliver quality projects to this size and scale. In addition, we have about 50 ongoing residential projects aggregating to 31.14 million square feet of developable area and 23.96 million square feet of saleable area.

On the contractual front, we have 31 ongoing projects covering 9.35 million square feet under various stages of construction,” he said.

Market sentiment

He added that there is an improvement in market sentiment after the formation of the new Government at the Centre.

The economy is showing signs of recovery and there has been an up-tick in investor sentiment.

“Inflation is under control, crude oil prices have declined and interest rates, having peaked, will most likely taper down.

“Despite this, the real estate sector is yet to benefit by the positive change in the economic conditions. Given the current scenario, we are of the opinion that recovery is not far away for the real estate sector,” Sharma said.

The Hindu Business Line

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