Sobha Expects Double-Digit Growth In FY20 Despite Liquidity Crunch
Cranes operate on residential construction site next to a highway in Bengaluru, India. (Photographer: Lakshmi Samyukta/Bloomberg)

Sobha Expects Double-Digit Growth In FY20 Despite Liquidity Crunch

Days after reporting its highest quarterly sales ever, Sobha Ltd.’s Managing Director JC Sharma said that he expects the real estate company to clock double-digit growth in financial year 2019-2020, despite a liquidity crisis affecting the sector.

“We know that as on the other side there is a liquidity crisis, non-availability of funds from the banking system or NBFCs, also the IPO market, is hurting the developers’ fraternity,” Sharma told BloombergQuint. Yet, companies like Sobha, Sharma said, are getting better opportunities in existing cities and new cities.

India’s real estate sector has been facing several changes—both internal and external, he pointed out. Housing finance companies and non-banking lenders have been undergoing a liquidity crunch since the latter half of 2018, triggered by defaults by Infrastructure Leasing & Financial Services Ltd.

The resulting rise in borrowing costs won’t affect the company’s growth, Sharma said. “We believe that once this sector starts gaining some attraction and tailwind, the demand-side scenario will start looking up.”

The company recently announced its earnings for the quarter ended March.

Key Highlights (YoY):

  • Revenue up 81.6 percent at Rs 1,397.8 crore.
  • Net profit rose 73.2 percent to Rs 113.3 crore.
  • Ebitda up 78.5 percent at Rs 243.5 crore.
  • Margin at 17.4 percent versus 17.7 percent.

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