Sobha Q2 net down 33% at Rs 40 cr

Total income fell 33% to Rs 456 crore

Bengaluru-based realty firm Sobha Ltd today reported 33% decline in consolidated net profit at Rs 40.1 crore for the quarter ended September 30, on lower sales.

Its net profit stood at Rs 59.5 crore in the year-ago period.

Total income fell 33% to Rs 456.1 crore from Rs 676.8 crore in the corresponding period of the previous year, Sobha said in a filing to BSE.

The company's share price fell 0.88% at Rs 331.50 apiece on BSE.

"It has been a difficult period for the real estate sector and the overall demand is yet to show a clear upward trend. The rate cuts announced towards the close of the quarter along with the additional relaxation in FDI norms for construction sector are positive steps for the revival of demand in the housing space.

"We remain hopeful that such initiatives should start yielding the desired results in the coming quarters," Sobha Vice Chairman and MD JC Sharma said.

On operational front, Sobha achieved a sales bookings of nearly Rs 500 crore during the said quarter. The Bengaluru market continued to perform consistently while there was an uptick in demand in the Chennai market.

Explaining the fall in profit, Sharma said: "During the quarter, 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 exuded confidence that the next half of this fiscal would see an improvement in the financial performance.