Moneycontrol Bureau
Shares of Sobha Developers rose over 5 percent intraday Tuesday on improving sales. The real estate developer has reported April-June quarter pre-sales at Rs 531.8 crore, up 1.5 percent year-on-year. After a sluggish 2014, its pre-sales trends have improved over the last two quarters driven by the company’s middle-income housing project launch Dream Acres in Bangalore. Non-Bangalore market performance is muted.
Average realisations slipped 9 percent (year-on-year) at Rs 6321 per sq feet versus Rs 6943 per sq feet. Price realisations dipped due to sale of low margin compact luxury segment Sobha Dream Acres.
The management says that the sector continues to face challenges due to slowdown and subdued demand and end customers are delaying or deferring purchase decision. It also adds that prevailing slowdown restrained companies from increasing product prices while only slight contraction in demand is seen in Bangalore market for high value products.
JP Morgan says that Sobha Developers' FY16 pre-sales guidance of Rs 2600 crore is achievable as launch activity scales up with an additional phase of its Bangalore affordable project and a new project in Chennai.
“Sobha's foray in the affordable segment has seen a positive response and has the potential to scale up pre-sales to a new level and also accelerate value-unlocking from Sobha's vast land holdings,” it says in a note.
The realty firm's net profit dipped 12 percent decline to Rs 61.5 crore in January-March quarter while total income decreased to Rs 509.3 crore. During the full 2014-15 financial year, Sobha's net profit rose to Rs 238.1 crore on an income which increased to Rs 2,455.5 crore.
At 10:07 hrs Sobha was quoting at Rs 375.00, up Rs 10.70, or 2.94 percent on the BSE.
Posted by Nasrin Sultana
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