The stock of Sobha, Bengaluru-based real estate developer, has risen 12 per cent so far on Tuesday. The boost came from strong sales in the March quarter of FY21, as per the company’s quarterly update put out after market hours on Monday. The company, which has presence across mid-income, affordable housing, premium and luxury housing, reported a 48 per cent increase in sales volume to 13.37 lakh sq ft during the March quarter, when compared to the same period last year.
Its sales in value terms saw 54 per cent y-o-y increase during the same period. According to the management, the company saw good sales across all segments. With numbers in the second half of March 2020 impacted due to lockdown, a slightly lower base could have also helped Sobha.
While residential segment is the main revenue generator, Sobha also has presence in commercial property, which contributes to 35-40 per cent of its revenue.
Sobha’s projects are predominantly based out of Bengaluru (this market contributes to over 60 per cent of revenue). However, it has multiple on-going projects in several cities, including Gurgaon, Chennai, Kochi, Thrissur, Coimbatore and Pune. During the March quarter, the Bengaluru market registered about 36 per cent y-o-y growth in sales volume. Pune, Kochi and Gurugram too witnessed strong double-digit volume growth in this period. This is thanks to the improving demand conditions and other factors such as low home-loan interest rates, stamp duty reduction, and the Centre’s push towards affordable housing.
This is a continuation of the trend seen in the previous (December) quarter. During the December quarter FY21, the company registered revenue and profit growth of 28 and 33 per cent y-o-y respectively.
Project launches on track
Demand is being witnessed not only in affordable and mid-income properties, but also in luxury and premium segments. This is evident from the rise in the company’s average price realisations. For the March quarter FY21, Sobha registered an increase of 5 per cent y-o-y to ₹8,014 per sq ft.
During the quarter, Sobha was able to launch three residential projects to the tune of 2.8 million sq ft of area and a commercial one in a space of 0.27 million sq ft.
Going ahead, according to the management, the project launches are on track in the coming financial year as well. As of December quarter, the company had about 14 residential projects and three commercial projects to be launched in the coming quarters.