Moneycontrol
Last Updated : Jan 07, 2019 10:20 AM IST | Source: Moneycontrol.com

Sobha shares gain 2% on good price realisation in Q3, analysts remain positive

The company's share of average price realisation per square feet also rose 1 percent year-on-year and 10.49 percent month-on-month to Rs 6,604 in October-December quarter.

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Sobha shares added 2 percent in morning on Monday after the South-based real estate company reported good average price realisation for the quarter ended December 2018.

Total sales volume during the quarter declined 2.6 percent year-on-year and 11.90 percent month-on-month to Rs 9,08,824 square feet, the company said.

Sales value of these volume also dropped to Rs 698.8 crore, down 7 percent compared to year-ago and 5.7 percent from previous quarter. Company's share in sales value also declined 1.7 percent YoY and 2.66 percent MoM to Rs 600.2 crore in the quarter ended December 2018.

Average price realisation per square feet slipped 4.43 percent YoY to Rs 7,689, but increased 7.07 percent over previous month.

The company's share of average price realisation per square feet also rose 1 percent year-on-year and 10.49 percent month-on-month to Rs 6,604 in October-December quarter.

Sobha has launched projects to the tune of 30,00,297 square feet in the quarter, including super luxury residential projects Isle and Raj Villas in Kochi and Bengaluru respectively and affordable residential housing project SOBHA Dream Gardens in Bengaluru.

"Despite a challenging macro-environment, we are confident of growth in sales momentum in the coming quarters," the company said in its filing.

In the next 2-3 quarters, Sobha is poised to launch one more affordable housing project in GIFT City (Gujarat) along with plans for launches in other categories as well in Bengaluru, Chennai, Thrissur and Pune. "This is expected to improve operational performance further."

While maintaining buy call with a target price of Rs 550 per share (implying 35 percent potential upside), Axis Capital said it likes company, its strong brand name and execution capabilities. "It is well-placed to capitalise on consolidation in the industry."

The brokerage house expects meaningful revival in Q4.

Morgan Stanley has overweight call on the stock with a target price at Rs 605, implying 37 percent potential upside.

"New launch momentum picked up during the quarter. We expect presales to remain steady, driven by both ongoing & new projects," it said.

At 09:46 hours IST, the stock was quoting at Rs 449.15, up Rs 7.85, or 1.78 percent on the BSE.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
First Published on Jan 7, 2019 10:17 am
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