See new launches of 10 mn sq ft in next 2-3 qrts: Sobha Dev

JC Sharma, Vice Chairman & MD, Sobha Developers is looking at lot of  launches going forward. "About 12 million plus square feet of new launches have been lined up, out of which about 2.6 million square feet is on the commercial space and around 10 million square feet should be launched in next 2-3 quarters," he adds.

The company plans to enter markets like Kochin, Bangalore, Trichur, Chennai in the coming 2-3 months, says Sharma. He is confident of achieving higher volumes, higher top-line and higher bottom-line for FY13-14 and expect realisations to be stable. "There is good visibility of about Rs 500 crore of revenues to be recognised in the remaining two quarters against the sales which have already been booked, as well as the 11 million square feet of the construction activities," he adds. The realisations for the company were up 14% year-on-year. The company has been out performing the realty index. Also read: 16 companies line-up to develop Ahmedabad Airport Below is the verbatim transcript of his interview on CNBC-TV18 Q: Can you take us through the performance in the second quarter? A: If you look at the quarter - the top-line is at Rs 544 crore. Even the Profit After Tax (PAT) is up by 17 percent. The volume growth has been also quite significant of more than 1 million square feet in this quarter under reference, against the guidance of 4.2 million square feet. The core margins have remained intact for both the real estate as well as for the contracting division and there is a good visibility of about Rs 500 crore of revenue to be recognised in the remaining two quarters against the sales which have already been booked as well as the 11 million square feet of the construction activities gives us clear visibility. About 68 percent of the total revenue has come from the real estate division and 32 percent has come from the contracts and the manufacturing side. There has been more than proportionate increase in the contracting revenue which also augers well during this tough and challenging environment. So, we believe that overall our objective of having higher volume, higher top-line and higher bottom-line should also be happening in the financial year 13-14. Last quarter we had USD 19.7 billion of unrecognised revenue, now it has gone up to close to USD 22 billion, which means about Rs 270 crore plus of revenue has yet to be recognised due to the higher sales in the last quarter, which has not qualified for our revenue recognition. Our interest cost has come down to 12.68 percent and the debt-equity also remains comfortable at around 0.57 percent. Q: What the realisations have been this quarter and how much have they grown on a Year-on-Year basis? A: The realisations have grown by about 14 percent on Y-o-Y basis. Last quarter's realisation has been about Rs 6,300/square feet and for the first six months it is about Rs 6400/square feet. Q: Do you think these realisations are sustainable? It has been a phenomenal rise that you have seen in your average realizations - For the second half of the year what is the sustainable realisation level that Sobha Developers can hold onto? A: We believe that this kind of realisation should remain sustainable. Of course the ability to pass on the increase in input cost in this tough environment maybe a bit restricted. However, the current prices should hold on which means that the average realisation may not see much of a fall. Q: Last time when we have spoken - you indicated that for the rest of the year you have about 9 million square feet of new launches. Any update beyond that? I heard you mention in the press conference that you have now entered into markets like Kozhikode as well. A: Yes, we have been planning lots of launches. About 12 million plus square feet of new launches have been lined up out of which about 2.6 million square feet is on the commercial space and remaining close to 10 million square feet should be launched in next 2-3 quarters. There had been some delays in getting certain approvals, but hopefully from the next month onwards there should be some regular launches. We should get into Kochin market in the next month and we should be launching projects in Bangalore, Kochin, Trichur, NCR as well as in Chennai in coming 2-3 quarters.