Sobha Developers net zooms 141% - Indian Real Estate Forum

Rashmi · 14-08-07

Real estate major Sobha Developers (SDL) recorded a 141% rise in net profit on a year-on-year (Y-o-Y) basis during the first quarter of FY-08.

Sobha’s net profit for the first quarter stood at Rs 40.79 crore, up from Rs 16.88 crore in the corresponding period in the previous fiscal. The turnover for the quarter also recorded a 30% YoY increase to Rs 267.79 crore. The new financial year has started on a good note with Sobha registering robust growth across all segments, and continuing to grow ahead of the market.

According to the company, the operating margins for the quarter stood at 34% as against 26% in the corresponding quarter of previous fiscal. It’s contractual projects continued their growth momentum through the first quarter by registering a 25% growth in revenue. The residential projects also recorded 48% Y-o-Y growth in revenue during the quarter.

SDL has acquired about 300 acres across south India in the last three months at a cost of about Rs 200 crore. Further, the company has close to 11.54 million sq ft under development in Bangalore and Thrissur. SDL has also obtained an in principle approval from the Kerala government for development of Hi Tech City at Kochi. Sources said the company is expected to ink an MoU with the Kerala government in a week’s time. In the pipeline is the development of a 200,000 sq ft mall in Bangalore.

Source: Economic Times

arun · 14-08-07

Keeping in mind the authenticity of the above news, I would like to draw the attention of the fellow forum-members to this news-snippet....

Quote:

Bangalore-based Sobha Developers has not been able to offer much to its investors as it has failed to deliver any new project during this quarter. The result has been a 25% decline in sales from the March quarter, though it clocked a 30% year-on-year topline growth for the June quarter.

Although the net profit margins have nearly doubled to 15% of net sales in the latest quarter, cash flows continue to be negative. While the company declared a net profit of Rs 40 crore, it had a negative cash flow of Rs 300 crore.

This is on account of increase in debtors and suppliers credit. It is normal for all real estate developers to pre-book their projects and increase their topline, but for Sobha this has only resulted in raising the project costs. Not surprisingly, about 40% of sales came from debtors. The customer advances received for this quarter was also a lowly Rs 63 crore.

Most of the new projects have still not reached the revenue recognition stage. This has resulted in high working capital requirement. As a result, the borrowings are up by 70% on a Y-o-Y basis. On the brighter side however, the company has reported 800 basis points improvement in operating margins to 25% of net sales. This indicates that real estate prices continues to remain high.

Source: economictimes.indiatimes.com
Date: 14 Aug'07

14-08-07	#1
Rashmi Member Join Date: Nov 2006 Posts: 90 Thanks: 0 Thanked 0 Times in 0 Posts	Sobha Developers net zooms 141% Real estate major Sobha Developers (SDL) recorded a 141% rise in net profit on a year-on-year (Y-o-Y) basis during the first quarter of FY-08. Sobha’s net profit for the first quarter stood at Rs 40.79 crore, up from Rs 16.88 crore in the corresponding period in the previous fiscal. The turnover for the quarter also recorded a 30% YoY increase to Rs 267.79 crore. The new financial year has started on a good note with Sobha registering robust growth across all segments, and continuing to grow ahead of the market. According to the company, the operating margins for the quarter stood at 34% as against 26% in the corresponding quarter of previous fiscal. It’s contractual projects continued their growth momentum through the first quarter by registering a 25% growth in revenue. The residential projects also recorded 48% Y-o-Y growth in revenue during the quarter. SDL has acquired about 300 acres across south India in the last three months at a cost of about Rs 200 crore. Further, the company has close to 11.54 million sq ft under development in Bangalore and Thrissur. SDL has also obtained an in principle approval from the Kerala government for development of Hi Tech City at Kochi. Sources said the company is expected to ink an MoU with the Kerala government in a week’s time. In the pipeline is the development of a 200,000 sq ft mall in Bangalore. Source: Economic Times

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