Sobha Q4 profits drop 41.3% to Rs 36.1 crore

Revenue up 10% to Rs 558 cr; firm achieves new sales of 885,685 sq ft with average realisation of Rs 6,037 per sq ft

Bengaluru-based realtor Sobha Ltd said its fourth quarter profits dropped 41.3 per cent to Rs 36.1 crore on higher provisioning for taxes, while revenue grew 9.66 per cent to Rs 558.5 crore on better sales of its properties.

Sobha had reported a profit of Rs 61.5 crore on revenue of Rs 509.3 crore in the same period last year.

In the January to March period, the company achieved new sales of 885,685 square feet valued at Rs 535 crore with an average realisation of Rs 6,037 per square feet. The new sales volume and value are higher by 10% and 12% as compared to the third quarter, the company said in a statement.

"At a broader level, fiscal 2016 was a year of positive developments for the real estate sector primarily on the economic and policy front such as liberalisation of foreign investment norms, tax incentives, the declining trend in interest rates etc. Another significant development has been the enactment of the Real Estate (Regulation and Development) Act or RERA, which will usher in greater transparency and professionalism in the sector and help to re-instil confidence among the customers. While these factors combined will lead to a demand recovery in the long run, the financial year 2015-16 continued to witness a downturn, especially in the residential segment," J.C. Sharma, Vice Chairman and Managing Director, Sobha Limited said.

In light of the present operating environment and industry absorption levels, the company targets to sell 3.50 million square feet of new area valued at Rs. 20 Billion during the financial year 2016-17, he said.

Sobha stock dropped Re 1.25 or 0.41 per cent to close at Rs 305.5 on Thursday on the Bombay Stock Exchange. (EOM)