Sobha Ltd

This Bangalore based company, usually announces its sales performance much before the Q3 financial numbers, something like a precursor of things to come. For the past few quarters, the sales numbers have been good but this time around, for current Q3, the company has reported that sales bookings fell by 6% (YoY) at Rs.502 crore due to low demand on account of the slowdown in the realty sector. It sold 0.74 million sq ft of new space valued at Rs 502 crore at an average price realisation of Rs 6,786 per sq ft v/s as Rs 5,910 per sq ft (YoY). Sales bookings volumes declined 18%.

The company, for FY14 had given a guidance of new sales area of 4.2 million sq ft valued at Rs 2,600 crore. And at end of Q3FY14, this stands at 2.66 million sq.ft valued at Rs.1737 crore. At this point of time, given the lackluster sentiments, interest costs expected to rise, demand is not expected to pick up any time soon. Under these circumstances, it seems doubtful that the company might be able to meet its guidance for Fy14.

The company had ended Q2FY14 with a 26% (YoY) rise in net profit at Rs.52 crore on a 34% rise in income at Rs.531 crore. Its average price realisation had increased to Rs 6,304 per square feet from Rs 5,575 per sq ft. It had generated Rs 136 crore of operational cash in Q2 and Rs.258 crore in H1Fy14.