Sobha’s Sales Rise For The First Time In Three Quarters

Sobha Ltd. sold more apartments in the quarter ended December after two consecutive quarters of falling sales.

The Bengaluru-based developer informed the exchanges today that it sold nearly 10.66 lakh square feet of real estate in the three-month period—a 17 percent increase over the previous year—netting nearly Rs 726.1 crore in sales value.

Of this, Sobha’s share was around Rs 607.5 crore. That’s because the company developed some projects in coordination with other realtors. Average realisation, however, fell nearly 11 percent to Rs 6,811 per sq. ft, the company said. It expects the metric to improve in the future on the back of good traction in its luxury and super-luxury projects.

Bengaluru accounted for nearly 77 percent of the sales, the company said. The company said it has constructed residential towers with saleable area of nearly 0.61 million sqft in the quarter in the southern metropolis and bagged a contract worth Rs 196 crore. That apart, the company said it has planned new launches totalling 10.46 million sqft in the coming quarters.

Inventory overhang improved across all major cities but the ones in south India are ahead, Biplab Debbarma, vice president at Antique Stock Broking, wrote in a note. Pune and Bengaluru have seen significant recoveries in the last 18 months, he said.

However, Amit Agarwal, research analyst at Nirmal Bang Securities, said in a report that cash flows have been weak for the company due to poor realisation and rising debt.

And that seems to have reflected in the company’s stock performance. Sobha has been the worst performer in the Nifty Realty Index over the past 12 months, declining nearly 11.4 percent, compared with the benchmark’s 28 percent gain.