Dear Sharholders and friends of SOBHA
FY 2021-22 has been one of many challenges and opportunities forenterprises and individuals alike which also reminds me of a very popular quote"Smooth seas don't make skilled sailors". Simply put this quote reflectsSOBHA's journey over the last year – on solid footing.
On a positive note SOBHA recorded its best ever quarters during thisfinancial year with highest ever sales and cashflow. One of our biggest wins has beenreducing our debt substantially and lowering our borrowing costs. This was made possibleby the resolve we made as a company to address this over time with clear milestonesidentified. While markets opened up and normalized steadily undoubtedly it is the zealand commitment of our employees that helped us deliver such a solid performance. I thankthem immensely for their contribution staying grounded yet being nimble enough to addressthe changing market and the economy which has seen its fair share of ups and downs.
A lot has been said and written about the geo-political situation theeconomy the pandemic and future growth scenarios. We at SOBHA are prepared and agileenough to capitalize on any challenge or opportunity ahead of us guided by our passion forexcellence and delivering quality products on time. This undying commitment has earned uscustomers' trust and a reputation in the market that we hold dearly.
We are recharging the SOBHA enterprise – implementing technologyacross operations skilling and reskilling teams making operations more stringentplacing greater focus on resource management and revisiting our strategy as often as isneeded to remain competitive and occupy a market-leading position.
During the year we witnessed increasing input costs in the form ofrising commodity prices and challenges associated with adequate manpower at sites which Imust admit had their fair share of challenges on account of the pandemic and inflation.
Despite these challenges and a reasonably uncertain environment SOBHAmaintained a steady sales momentum through the year and achieved historic sales andcashflows in financial year 2021-22. Robust cashflows helped reduce our net debt by 5.16billion in financial year 2021-22 bringing down our Net Debt/Equity ratio below 1. Thecompany's focus on execution improved delivery and strong real estate sales alsosignificantly contributed to its performance. The company achieved its highest ever salesvolume in FY 22 at 4.91 mn. sq. ft. which is ~22% higher than its sales volume in thepreceding year and the pre-pandemic FY 19. We almost doubled our net profit from 629million in FY 21 to 1160 million in FY 22.
Our real estate presence in Indian cities is promising. We havecompleted projects located across 7 cities with a total developable area of 63.04 mn. sq.ft since inception. We also have more than 15 new residential projects in the pipelinewith a total saleable area of 13.21 mn. sq.ft.
In the contractual segment SOBHA has completed 57.04 mn. sq. ft. ofarea for various clients in 27 cities across India till date. Currently SOBHA isexecuting 3.29 mn. sq. ft. of area across 6 cities.
Demand in the housing sector is holding out and will continueincluding in our primary market Bengaluru where we see good traction in the luxurysegment. Post-pandemic there is an increasing and positive sentiment to own homes withthe demand for larger homes as well. The IT sector is one of the catalysts of this growingdemand but may balance out with any impending interest rate hikes the currentgeo-political situation and the overall health of the global economy.
But as in the past your SOBHA will continue to remain resilient andstrong footed. We will continue to leverage our strong backward integration model thatallows us to scale up as required and continue to deliver on time and with impeccablequality – which is the essence of SOBHA.
I am also pleased to share that the SOBHA Dream Acres project inBengaluru that consists of approximately 7000 flats is one of the largest properties inIndia is being developed using precast technology. This technology helps reduceconstruction time by over 30 per cent.
SOBHA has always invested in R&D to ensure better quality costoptimization and following world-class engineering and execution methodologies to enhanceits competitiveness. Soil testing best-in-class formwork testing of concrete blocks atsite and pile integrity tests are a few areas where we have made significant progress.These new initiatives are now a part of our standard project execution process and haveyielded significant benefits for the organization. This willingness to learn and adaptcombined with our extensive real estate execution experience spread across more than 27cities in India has enabled us to constantly improve our construction capabilities.
Our recent recognition by the Indian Green Building Council (IGBC) aplatinum rating for ‘Net Water Positive' for our SOBHA City Thrissur project isa humbling experience. A manmade lake was conceived by our Founder and Chairman EmeritusMr PNC Menon way back in 2006 that helps conserve rainwater - making the entireresidential cum commercial township completely self-sufficient.
We at SOBHA strongly believe that giving back to society is critical tosustain and better human lives. Our Corporate Social Responsibility (CSR) takes‘Devotion at Work' much like our philosophy ‘Passion at Work.' Ourefforts that come from the heart touch the lives of the less fortunate and those inbackward areas. Education providing support for single mothers employment andhealthcare facilities are some ways by which we continue to make a positive difference.
On a closing note I would like to thank our colleagues on the Boardfor their valuable support and guidance and for encouraging us to do what is best andright. As always my gratitude and heartfelt thanks to all Sobhaites no matter where theyare situated at our sites factories or offices each one of them is a strong buildingblock of SOBHA.
Wishing each of you and your loved ones well. Stay safe.
Ravi PNC Menon
Chairman
Sobha Ltd.
