Shares of Bangalore-based real estate developer Sobha Limited The National Stock Exchange gained nearly 4% in early deals on Monday after the company reported strong sales performance for the December quarter. In its operating update, the company said that including its stake in combined development projects, it has achieved sales volume of 1.32 million square feet (msf), up 17% year-on-year (year-on-year) with the sale value. – year). 1,048 crore, up 18% year-on-year. Sequentially, however, sales declined a modest 2%. Average receipts on a per square foot basis grew 4% sequentially, but were flat as compared to Q3FY21.
Bengaluru continued to be the dominant market for the company, contributing 72% to the total sales volume in Q3FY22. Sales volume in the Bengaluru region was approximately 0.96 msf, up 20% sequentially and 22% year-on-year. In its press release, the company said that Gurugram, Pune and GIFT City also performed well during the quarter and as a result of nine months they have already exceeded the sales volume achieved during FY2011. It added that Gurugram’s sales volume grew by 97% in Q3FY22.
The company continues to deliver. Analysts at Antique Stock Broking Ltd said Q3FY22 marks the fifth consecutive quarter of debt reduction.
“Total cash flow with significant collections from the real estate business. The focus on rapidly monetizing its land bank and not making significant investments in land is expected to sustain such cash flow momentum and divergence from Sobha Expected to continue (target debt/equity is expected to surpass 1:1) going forward,” the domestic brokerage house said in a report on January 10.
According to the company, it is also seeing a reduction in the cost of borrowing.
Meanwhile, in the past one year, the shares of Shobha Limited have outperformed Nifty Realty with returns of around 78%. The latter has given a return of 47% in the same period. Strong sales in the company’s key market Bengaluru, which is an IT hub, is said to have driven the rally. While the contribution of non-Bengaluru markets is seeing an improvement, overinvestment in only one sector is a risk, cautioned analysts.
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