Sobha rallies 14% on reporting best ever sales volume in September quarter

Shares of real estate developer Sobha rallied 14 per cent to hit a fresh 52-week high of Rs 868.45 on the BSE in Thursday’s intra-day trade after the company said it has achieved best ever sales volume of 1.35 million sq ft valued at Rs 1,030.2 crore during July-September quarter (Q2FY22). The company had reported total sales value of Rs 682.90 crore in Q1FY22 and Rs 689.90 crore in Q2FY21.

The structural changes in real estate sector has created never before opportunities for the established, financially strong and multi-location-based developers to capitalise on the gradual but stable pickup in housing demand, Sobha said in its Q2FY22 operational update.

The consensus of most of the experts in this sector remain that the work from home, low interest rates, increased affordability, significant pickup in the prospects of IT sector and increase in salaries etc. and focus of banking sector to support home buyers augur well for the sustainability in the demand, the company said. “Steady reduction in unsold inventory and demand revival are lifting the housing market out of the down cycle. Prices are nosing up. This along with potential market share gains places organized developers in a sweet spot,” it added.

The overall sales were primarily driven by good sale numbers achieved in Bengaluru, Gurugram, Pune and GIFT CITY, noted ICICI Securities. "The sales volume run rate is at similar levels to Q4FY21 (pre-second wave) and implies strong recovery. Festive quarter traction ahead is likely ahead. Most importantly, debt, which has remained elevated, will be the key monitorable," ICICI Securities added.

At 12:22 pm, the stock of Sobha was up 14 per cent at Rs 861 on the BSE, as compared to a 1.1 per cent rise in the S&P BSE Sensex. The trading volumes on the counter jumped over three-fold with a combined 2.15 million equity shares having changed hands on the NSE and BSE.