Shares of Bangalore-based property developer Sobha opened the day with a gap down. The company’s share price nose-dived due to lacklustre December quarter sales numbers reported yesterday. The stock later pared some of the losses and was down 2 per cent by mid-day.

Sobha’s third quarter 2014-15 numbers were ‘operationally subdued’ according to the company’s filing with the BSE. New sales stood at 661,451 sq ft, down 10 per cent compared to the same period last year. While the area sold in Bangalore, Mysore and Pune remained steady, other geographies disappointed. The NCR market, for instance, saw a 60 per cent annual drop in sales. Sales also plummeted 65 per cent this quarter compared to the September quarter in Kochi.

Neither was there a pick-up in sale price. Average realisation was Rs 6,456 per square feet, compared with Rs 6,703 in the earlier quarter. It is likely that the product sales mix, rather than the drop in actual sale price contributed to the dip in average numbers. Gurgaon and Kochi are the higher priced home markets for Sobha and lower sales in these regions could have affected average prices. Total sales for the December quarter came in at Rs 427 crore, down 15 per cent year-on-year.

Sobha noted that the “sluggish pace of project approvals in the southern markets of Kerala and Tamil Nadu” affected the saleability of its projects. The company also expressed “caution” in meeting its sales guidance of 4 million sq ft (msf) valued at Rs 2,700 crore for 2014-15. For the nine months in 2014-15, it has only achieved 2.25 msf valued at Rs 1,468 crore. Therefore, achieving its annual targets appears unlikely.

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