Sobha rises on strong volumes after company reports best yearly sales

Last Updated: Fri, Apr 06, 2018 14:27 hrs
Real Estate (PTI Photo)

Shares of realty firm Sobha Limited have moved up sharply on impressive volumes today.

The stock spurted to Rs 564 and is currently traded at Rs 548.70, up 8% from Thursday's closing price. On the National Stock Exchange too the stock touched a high of Rs 564. It is currently at Rs 550, up 8.1% from its previous closing price.

On BSE, the Sobha counter has clocked a volume of over 2.26 lakh shares so far in the session, more than 10 times the average daily volume of 22,000 shares. On NSE, the counter has clocked a volume of about 2.81 million shares so far today.

The stock's impressive upmove today is due to a report from the company that shows its consistent and exceptional performance in the fourth quarter and the financial year ended March 2018.

The company says in its report that the year was memorable for various structural changes at the macro and micro level. Even as the roll out of landmark reforms of Real Estate (Regulation and Development) Act, 2016 and GST during the year resulted in uncertain and difficult environment for the realty sector, the market sentiment did show signs of improvement.

Reduced interest rates on home loans, controlled inflation and necessary impetus by the Government to affordable housing through affordable housing fund, lower GST rates, increased tenure of loans under Credit Linked Subsidy Scheme of Pradhan Mantri Awas Yojana and extended income tax benefits to apartments of carpet area of 60
square metre helped improve sentiment in the sector.

A report from CRISIL indicates the possibility of the real estate and construction sector creating over 15 million jobs by 2022.

In value terms and in terms of growth across regions and product categories, Sobha's operational performance for the fourth quarter and for the financial year 2017-18 was the best ever so far. During the year, the company registered new sales volume of 3.63 million square feet, totally valued at Rs 28.61 billion at an average price realisation of Rs 7892 per square foot. Annual sales volume and values jumped 21% and 42% respectively.

In the fourth quarter alone, the company achieved new sales volume of 1.02 million square feet, totally valued
at Rs 8.12 billion at an average price realisation of Rs 7993 per square foot. Sales volume and values were up by
40% and 31% respectively, compared to the corresponding quarter of the previous financial year. Compared to the preceding quarter, they were up 9% and 7.5%, respectively.

Sobha said that its core market Bangalore registered highest ever sales performance both in volume and value terms for the financial year 2017-18.

In the third quarter, Sobha Ltd's sales bookings increased by 92% to Rs 750.9 crore, compared to corresponding quarter last fiscal on higher volumes and better average realisation. The average price realisation increased 26% y-o-y to Rs 8045 per square foot during the period.

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