On track to meet FY12 sales target: Sobha Developers

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On track to meet FY12 sales target: Sobha Developers

In an interview to CNBC-TV18, JC Sharma, managing director, Sobha Developers said, "We remain confident and as we have communicated that this Rs 1,500 crore guidance should be achieved comfortably in this financial year. Going forward, we hope to do better."

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Real estate player, Sobha Developers is hopeful of performing well in the current quarter and meeting its annual sales target.

In an interview to CNBC-TV18, JC Sharma, managing director, Sobha Developers said, "We remain confident and as we have communicated that this Rs 1,500 crore guidance should be achieved comfortably in this financial year. Going forward, we hope to do better."

It is hopeful of sustaining volumes in the NCR region, which is one of the biggest markets of India. However, Sharma doesn't expect real estate prices to be softer that the current levels .

Below is the edited transcript of Sharma's interview with CNBC-TV18. Also watch the accompanying video.

Q: The market clearly encouraged by the CFO statement yesterday that you could you could well exceed your 3 million square feet sales target and you had a decent Q3 performance with improvement in realizations. What could one expect in Q4 and then next year?

A: We have always believed in our real estate story and our figures speak for themselves. We are also aware of the fact that due to continuous increase in interest rates by the Reserve Bank of India and the environment is not allowing liquidity to play its role.

But, we believe that under such constraints as well, we should be in a position to take care of our customers' requirement by offering them multiple products at multiple locations. Our last nine months performance speaks about that strategy, where volumes are better, realizations are better. Going forward, we do believe that in this quarter also we will do well as we have done in the previous quarters and should be meeting our annual target.

Q: Sales in the Gurgaon project have been largely stable as compared to Q2, although we have seen a slight drop in Bangalore what is the outlook on the NCR region particularly?

A: We have always believed that NCR is one of the biggest markets of India. It has the required depth and our product offering is a unique proposition where the product is at the edge of the Delhi. Due to this strategic locations and our product offering, we do believe that going forward the volumes we have achieved should remain sustainable.

Q: You have seen a significant volume moderation in Bangalore. Is that due to sluggish new launches or is there a genuine demand resistance, a demand decline?

A: No, I do not believe that way. It is all in the bending of the products. We have been selling in the last quarter in Bangalore also, which tends to bring down average realisation. Otherwise on a product basis, prices have remained more or less stable not only in Bangalore, but across all regions.

Going forward, looking at the way we are going through with this the increase in the construction cost and other related troubles we face, we do not feel that the prices can become softer than where they are currently.

Q: What are the new launches on the anvil?

A: We have lined up a number of launches in this quarter also. Hopefully, this also should add to the overall offerings of Sobha products. This quarter onwards new launches will be there. We hope to launch another 8 million square feet or so in next three-four quarters this calendar year also including this quarter.

Q: So what about sales then, you have pretty much achieved 85% of your guidance of Rs 1500 crore. What kind of an expectation can one have? You will definitely, substantially exceed that target this year?

A: We have to still cross the first 3 months. We remain confident and as we have communicated that this Rs 1,500 crore guidance should be achieved comfortably in this financial year. Going forward, we hope to do better.

Q: What's the expectation on the volume front, your CFO of course saying that you will definitely exceed the 3 million target. What are you expecting? Could it be more than 3.5 million?

A: Even the last nine months have not been particularly very good for the industry, but we have performed. We have the basic belief in the real estate story in India and cities from where we are operating. We are also aware of the challenges, which we had faced in the past and will continue to face going forward. We do believe that there is clear demand supply equilibrium which favors the developers.

If you provide a right product at the right price somewhere there is a demand. Fortunately, because of this rupee depreciation we are seeing lot of activities happening outside India with our NRI customers and offtake has started improving. We do believe that when you look for opportunities, those opportunities come your way and it helps you in meeting your targets.