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Sobha tumbles after Q2 sales update

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Sobha fell 4.11% to Rs 428.90 after the company issued sales update for Q2 September 2019.

During the quarter, Sobha achieved new sales volume of 10,36,340 square feet valued at Rs 682 crore, with a total average realisation of Rs 6584 per square feet (Sobha's share of sales value is at Rs 561 crore). The new sales volume is up by 0.45% as compared to the corresponding quarter of last year.

Total sales value fell 7.90% to Rs 682.30 crore in Q2 September 2019 over Q2 September 2018. Sobha's share in the total sales value fell 9.02% to Rs 561 crore in Q2 September 2019 over Q2 September 2018.

Total average price realisation fell 8.31% to Rs 6584 crore in Q2 September 2019 over Q2 September 2018.

Despite Government's efforts to revive the real estate sector to achieve its mission of "HOUSING FOR ALL BY 2022", overall sentiments have not improved. This has impacted the demand in the sector. Liquidity crisis still prevails in the Indian realty sector, which further weakens the demand. The benefit of five consecutive rate cuts by RBI is yet to be passed on to the corporate borrowers by banks/financial institutions, as the banks are still struggling with their non-performing assets (NPAs) and other issues and hence are reluctant to pass on the rate cut benefit to the borrowers, Sobha said in a statement.

With flood water receding across the country and with the beginning of the festive season, the second half of FY 2019-20 will be better than the first and will improve the company's performance for the FY 2019-20, it added. The announcement was made on Saturday, 5 October 2019.

Shares of Sobha have declined 15.30% in six trading sessions to its current market price of Rs 428.90 from a recent closing high of Rs 506.35 on 26 September 2019.

Meanwhile, the S&P BSE Sensex was up 126 points or 0.34% to 37799.76.

On the BSE, 3089 shares were traded in the counter so far compared with average daily volumes of 8172 shares in the past two weeks. The stock hit a high of Rs 441 and a low of Rs 425.65 so far during the day.

The stock hit a 52-week high of Rs 587.95 on 16 Jul 2019. The stock hit a 52-week low of Rs 380.5 on 10 Oct 2018. The stock is currently trading 12.72% higher from its 52-week low.

On a consolidated basis, the real estate development company's net profit rose 72.2% to Rs 90.60 crore on a 96.9% rise in the net sales to Rs 1176.70 crore in Q1 June 2019 over Q1 June 2018.

Sobha is a real estate brand in India. It has made several developments in Bangalore, Kerela, Delhi - NCR, Chennai, Coimbatore, Mysore and Pune.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, October 07 2019. 13:50 IST