Sobha Positive On Contract Manufacturing Business

Sobha Ltd. expects to report good growth in its contract manufacturing division over the next two years.

That’s the word from Vice Chairman and Managing Director JC Sharma. “In the last two years, we have developed a good stream of income and did almost Rs 850 crore of billing on the contracting side,” Sharma told BloombergQuint in an interview.

The company started the contract manufacturing business with a single client, Infosys, nearly 12 years earlier and has diversified its base since then. The order book from this division currently stands at around Rs 2,500 crore.

Other highlights from the conversation:

• Sobha expects 2018-19 to be better than the previous financial year.
• Expects interest costs to remain under control.
• Expects balance sheet to show healthy growth.
• Business still sluggish in the residential space despite reforms.
• Contracting business has lesser margin compared to residential real estate.
• Will not only sustain margins but beat industry standards.
• Have a line-up of around 8 million square feet of projects.
• Project launches should start in June.
• New launches will help improve sales in this financial year.
• Bengaluru will have the highest number of launches.
• Average realisation stands at Rs 7,993 per square feet.

Watch the full interview here: