A significant increase in provision for income tax has led to a 10 per cent dip in net profits for Bangalore-based real estate company Sobha Developers, to Rs 30.9 crore during the first quarter of this fiscal. Last year, the company recorded Rs 34.3 crore during the corresponding quarter.

However, its net sales went up marginally to Rs 316.7 crore (Rs 309.7 crore) during the quarter. “Sales in the first two months of the said quarter were not good.

However, it picked up during the third month,” Mr J.C. Sharma, Managing Director, Sobha Developers, told Business Line .

Of these, around Rs 300 crore came from real estate developments and the rest from contractual business, he pointed out.

“During the first quarter, there was a robust improvement in contractual business. We are well on course to achieving our targets of Rs 500 crore of revenues from contractual business for the year,” he said. The company saw 0.66 million sq ft of new sales this quarter, “with a better realisation of Rs 4,547 per sq ft,” he added.

“The average realisation improvement helped us mitigate input cost increase and going forward, will help improve our margins also if the trend continues,” said Mr Sharma.

The current global economic crisis would only have a “short-term psychological impact”, he said, adding that with crude prices stabilising, inflation is expected to be controlled.

However, on the interest rate hike front, Mr Sharma admitted that in case of a further rate hike, “there could a short-term impact on demand for real estate”.

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