Hope to bring debt below Rs 1100cr in Q4: Sobha Developers

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Hope to bring debt below Rs 1100cr in Q4: Sobha Developers

In an exclusive interview to CNBC-TV18, the managing director of Sobha Developers, JC Sharma, says that they hope to bring down the debt on their books to Rs 1,100 crore in this quarter.

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In an exclusive interview to CNBC-TV18, the managing director of Sobha Developers , JC Sharma, says that they hope to bring down the debt on their books to Rs 1,100 crore in this quarter. "We also hope to bring down our debt equity ratio to about 0.55 from the current 0.65," he added.

The company, which released its results on Saturday, so a de-growth on a year-on-year basis on the revenues and profits front.

Going into FY13, Sharma says that they have lined up 6 million square feet of new projects.

Below is an edited transcript of his interview with Avni Raja. Also watch the accompanying video.

Q: On revenues and profit front you have seen a de-growth on a year on year basis. Can you take us through the reason for that?

A: We currently have Rs 968 crore worth of new sales where we are not recognizing the construction income. So while the cash flow has just started coming in, the same is not getting transmitted into the P&L account and so it is not reflected in our revenues.

Besides that, we have a subsidiary company where we have 100% control and have bought back 100% equity also from our partners. There also there has been a turnover of Rs 30 crore with PAT of Rs 5.5 crore the same is not getting reflected.

Also in last year the same quarter, we had Rs 34 crore worth of land benefits with 35% plus margins. That also is not getting reflected in this quarter. If you look at operationally this quarter is relatively much better than the previous year quarter as well as the corresponding quarter also where there was a PAT of about Rs 40 crore on a higher turnover without considering these things.

Q: With respect to your debt levels, I understand it is around Rs 1200 crore currently. How much do you see that going down by this year?

A: Currently our debt equity stands at 0.65 and we hope to bring that down to about 0.55 and the debt level should fall below Rs 1100 crore in this quarter itself. Currently our debt stands at about Rs 1274 crore which was Rs 1362 crore in the preceding quarter.

Q: Can you take us through your margin outlook and also your volume guidance of 3 million square feet for FY12? Are you likely to see that?

A: Yes. We had already clocked 2.42 million square feet of new sales in the first nine months. We have clocked about Rs 1240 crore of new sales against the guidance given of about Rs 1500 crore. In this quarter we hope to exceed 3 million square feet as well as Rs 1500 crore turnover target hopefully and comfortably.

As far as the margins are concerned, we are currently operating on 35% plus margins despite increase in input cost as well as interest cost.

Q: Can you take us through what new projects you have lined up?

A: We have launched two projects in Chennai. We also hope to launch two projects, one in Bangalore and one in Coimbatore, in the next two months. We have also lined up about 6 million square feet of new projects in the coming financial year in the next three quarters.