Sobha declines after unveiling weak Q2 results

Sobha shed 0.81% to Rs 325 at 10:00 IST on BSE after consolidated net profit fell 32.6% to Rs 40.10 crore on 32.6% decline in total income to Rs 456.10 crore in Q2 September 2015 over Q2 September 2014.

The result was announced after market hours on Friday, 13 November 2015.

Meanwhile, the BSE Sensex was down 102.84 points, or 0.48%, to 25,488.62.

On BSE, so far 4,424 shares were traded in the counter, compared with an average volume of 37,519 shares in the past one quarter.

The stock hit a high of Rs 336.40 and a low of Rs 319 so far during the day. The stock hit a 52-week high of Rs 536 on 4 December 2014. The stock hit a 52-week low of Rs 244.20 on 23 September 2015.

The stock had outperformed the market over the past one month till 13 November 2015, rising 7.23% compared with 4.6% fall in the Sensex. The scrip had also outperformed the market in past one quarter, gaining 6.07% as against Sensex's 7.04% decline.

The mid-cap company has an equity capital of Rs 98.06 crore. Face value per share is Rs 10.

Mr J C Sharma, Vice Chairman and Managing Director Sobha commented on Q2 results that it has been a difficult period for the real estate sector and the overall demand is yet to show a clear upward trend. During Q2, the contribution from contractual and manufacturing operations was relatively higher. However, the sales in real estate projects which have reached the revenue recognition threshold were lower than expected, resulting in a low-key financial performance. He said that with the Sobha Dream Acres Project qualifying for revenue recognition during this financial year ending 31 March 2016 (FY 2016), the next half of the fiscal should see an improvement in the financial performance.

Sobha is a backward integrated real estate player. The company is primarily focused on residential and contractual projects.

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