Apr 10, 2013, 02.21 PM IST
Indian multinational real estate company, Shobha Developers has been showing a positive sales momentum. JC Sharma, Vice Chairman & MD, Sobha Developers believes that this will continue. Infact he hopes that the real estate market will grow in double digits in FY14.
He told CNBC-TV18 that the company will continue to generate positive cash flows and maintain margins at current levels of 29 percent.
He also informed that 90 percent of the growth comes from combining Bangalore, Gurgaon, Chennai, Trichur and Pune. Bangalore has been an outperformer on a consistent basis and last quarter was good for Chennai market. The only sad part is that Gurgaon residential market is showing some sign of slowdown.
Below is the verbatim transcript of his interview to CNBC-TV18
Q: Is FY14 going to be an on core of FY13? What’s your sense?
We do believe that as far as real estate industry is concerned the micro environment still remains favorable to developers who have been executing the projects on timely basis.
Also to once who have been pricing their products in accordance to the requirement of the customers as well trying to protect the margins vis-à-vis the inflationary cost.
Q: In which cities are you witnessing this kind of improvement in demand especially the Rs 670 crore that you have been able to report in terms of presales in fourth quarter? Which are the main cities they have come from?
The last quarter had been particularly good for Chennai market and Gurgaon market. Bangalore usually has been the consistent outperformer. It has also done very well.
Q: Can we expect this one million square feet run rate of sales per quarter to continue or in Q4 you saw some exceptional sales?
Going forward, we do believe that on an annual basis, whatever we have achieved in the last quarter, one million kind of a thing. While, we have give our annual guidance only after our board meeting, but we hope that we should be able to sustain the momentum that we have achieved in this financial year.
Hopefully, we should be doing this kind of a performance in all the markets where we are operating.
Q: You have got an improvement in realisations as well, not just in Q4 but for FY13. How much of it is because of a change in product mix and how much of it is because you can pass on higher cost for the same value project?
We are realising it on a phase wise basis. As and when we are releasing from the launched projects, in the new phase we re-evaluate the market conditions with inflationary impact and accordingly revise our prices.
We believe that the 6-8 percent kind of an inflationary cost, which is impacting all of us, we should be able to pass on even going forward.
Sobha Developer stock price
On December 10, 2013, Sobha Developers closed at Rs 341.40, up Rs 5.75, or 1.71 percent. The 52-week high of the share was Rs 472.40 and the 52-week low was Rs 214.10.
The company's trailing 12-month (TTM) EPS was at Rs 21.83 per share as per the quarter ended September 2013. The stock's price-to-earnings (P/E) ratio was 15.64. The latest book value of the company is Rs 215.85 per share. At current value, the price-to-book value of the company is 1.58.
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