Sobha rallies after QoQ improvement in operations

The Bengaluru-based realty developer said it achieved a total sales volume of 891,700 square feet valued at Rs 690 crore, with a total average realization of Rs 7,737 per square feet during Q2 September 2020.

Sales volume, total sales value and Sobha share of sales value during Q2 September 2020 were up by 37%, 41%, 35% respectively compared with Q1 June 2020. This performance was achieved despite lockdown being imposed in Bengaluru in July 2020, no new launch during the quarter, uncertain macro-economic outlook and tough real estate sector scenario, the company said.

The company said its price realization of Rs 7,737 per square feet achieved during Q2 September 2020 is the highest price realization achieved by the company as compared to past five quarters. The total average price realization was Rs 7,498 per square feet in Q1 June 2020 and Rs 6,584 per square feet in Q2 September 2019.

It has also achieved higher sales value of Rs 689.90 crore in Q2 September 2020 as compared to Rs 682.30 crore in Q2 September 2019.

The company said its dependency on Bengaluru sales volume has reduced from 74% during Q1 June 2020 to 60% during Q2 September 2020.

Sobha added that it continues to enjoy sufficient liquidity from banks/Fl to meet its obligations. It said it remains focused on cash flow management and cost optimization and continues to pare its average cost of borrowing. As a result, cost of borrowing as of 30 September 2020 came down meaningfully. The realty developer said the inquiry levels are almost at the pre-covid levels, which will help the company perform better in the second half of the financial year ending March 2021.

Shares of Sobha rallied 5.71% to Rs 252.80 on BSE. Sobha is a real estate player primarily focused on residential and contractual projects.

Its consolidated net profit slumped 92.7% to Rs 6.6 crore on 70.3% decline in net sales to Rs 350 crore in Q1 June 2020 over Q1 June 2019.

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