Two developments in Sobha since yesterday’s market closure.

First – the company published a note on the Covid impact on its operations and looks like its an uphill task.

The company said that post easing of lockdown in first week of May, all its offices, sites and factories got operational in line with respective state rules and regulations but it started witnessing labor migration issues across all states. This had an adverse impact on its operations at project sites and factories. During April and May months, the company said that it saw a dip in sales but from June onwards, it saw some inquiries at the pre-Covid levels and sales numbers improved.

The company said that though its operations were returning to normalcy levels, that situation is dynamic with Karnataka announcing a new lockdown in Bengaluru from 14th to 23rd July.

Though liquidity positions are comfortable, the company said that since construction activities are impacted at project sites due to this pandemic, it will have an adverse impact on its billing and revenue recognition as there will be some delay in handing over of the apartments.

Second – this news mitigated the negative impact which otherwise the first news would have had.

The Godrej group hiked stake in the company through its wholly owned subsidiary, Anamudi Real Estates LLP to 9.99% in June to 1.08% held at end of March.

As at 30th June’20, promoter stake has gone up from 51.78% to 51.90%. FIIs holding has come down from 23.37% to 19.48%.

The stock is currently just about in the positive zone. The stock, which had closed yesterday at Rs.232.10, opened today at Rs.235.05 and went on to an intraday high at Rs.238.05. It has come off the high and is currently at Rs.233 levels.