Sobha Developers drops after weak sales in Q3

Sobha Developers lost 2.12% to Rs 326 at 9:21 IST on BSE after the company said that its sales volume declined 17.77% at 0.74 million square feet in Q3 December 2013 over Q3 December 2012.

The announcement was made after market hours on Friday, 3 January 2014.

Meanwhile, the S&P BSE Sensex was down 42.63 points or 0.2% at 20,808.70.

On BSE, so far 2,616 shares were traded in the counter as against average daily volume of 14,000 shares in the past two weeks.

The stock hit a high of Rs 334 and a low of Rs 324 so far during the day.

Sobha Developers' sales value declined 5.83% at Rs 502.30 crore in Q3 December 2013 over Q3 December 2012. Average price realization rose 14.82% at Rs 6,786 per square feet in Q3 December 2013 over Q3 December 2012.

During the quarter (Q3 December 2013), the company has launched Elan (a joint development residential project with Lakshmi Machine Works) in Coimbatore having a total saleable area of 0.32 million square feet (msf) and Sobha Estate (plotted development) in Mysore having a total saleable area of 0.13 msf. Both the new launches have generated a positive response from the customers, Sobha said in a statement.

Sobha said that it remains upbeat about the company's key South Indian markets despite a lower sales volume during the quarter. The company also anticipates an uptick in the sales momentum in the coming quarters due to proposed new launches across its existing markets.

Sobha had at the beginning of the fiscal set a guidance of new sales area of 4.20 msf valued at Rs 2600 crore for the current fiscal (FY 2014). At the close of three quarters of FY 2014, the company has registered new sales area of 2.66 msf valued at Rs 1737 crore. While the company is able to maintain better sales realizations and generated consistent operational cash flows, it remains cautious about achieving its guidance set for the current fiscal, Sobha said in a statement.

Sobha Developers' consolidated net profit rose 13% to Rs 56.60 crore on 30.4% growth in net sales to Rs 540 crore in Q2 September 2013 over Q2 September 2012.

Sobha Developers is a real estate developer. It is primarily focused on residential and contractual projects.

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