Realty firm Sobha's Q2 post-tax profit zooms 165%, sales at all-time high

Real estate developer Sobha’s profit after tax rose 165 per cent to Rs 45.4 crore in the September quarter, compared to Rs 17 crore in the year ago period. The company posted a revenue of Rs 819 crore in the quarter, up 59 per cent on a year on year basis.

This came on the back of the best ever quarterly sales volume of 1,348,864 square feet of super built-up area valued at Rs 1,030 crore. The company’s cost of raw materials consumed reduced 5 per cent to Rs 45 crore in the September quarter, compared to the year ago period.

Its land purchases at cost skyrocketed to Rs 56.5 crore in Q2FY22 from Rs 20 lakh in the immediately preceding quarter and from Rs 5.5 crore in Q2 FY21, indicating new projects and revival of demand for housing after the two waves of the pandemic.

J C Sharma, vice chairman and managing director of Sobha, said, “ Our all-time high sales volume achieved during the quarter is very encouraging. We expect to sustain the momentum along with gain in market share. The real estate sector has been continuously exuding signs of optimism as the fear of Covid -19 wanes gradually.

“The innumerable interactions between the developers and the buyers have moved to online platforms bringing in seamlessness in business transactions and ease of doing so. This shift has made the young Indian generation and NRIs the vital emerging prospective home buyers,” he added.

During the quarter, Sobha launched two residential projects --‘Sobha Manhattan’ in Bengaluru and ‘Sobha Arbor’ in Chennai with a built-up area of 875,242 square feet and 286,689 square feet, respectively. Apart from Bengaluru, which is a key market for the company, Gurugram, Pune and GIFT CITY regions also showed promise in Q2 for Sobha.

The company said that its completed unsold inventory stands at 4 lakh square feet as of September end. Its net debt has shrunk by Rs 39 crore during the quarter despite dividend payment and borrowing cost stands at 8.85 per cent.

Anuj Puri, chairman of real estate consultancy firm Anarock, said: "It comes as no surprise that leading listed developers such as Sobha are seeing strong growth in their quarterly numbers. Our data recently indicated that the top 7 cities saw total housing sales of approx. 62,800 units in Q3 2021. Considering the present scenario, we anticipate at least 30-40 per cent growth in the ongoing festive quarter (Oct.-Dec. period) against the preceding one."