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SOBHA DEVELOPERS: Key takeaways
Residential business remains steady. Sobha mentioned that prices are stable and their
launch calendar remains intact. Sobha Elysium is the largest pipeline project in Bangalore
with 2.9 mn sq. ft of mixed-use residential development.
Gurgaon launch will determine FY2012E. Sobha mentioned that they are gearing up for
launching Gurgaon which is 51% of total area that Sobha intends to launch over the next
few quarters. They are conscious of this being their entry in Gurgaon and intend to go all
out to ensure its success.
Contractual business. Sobha has approx. 13 mn sq. ft of construction almost equally split
between current execution and order book. Total order book outstanding is over Rs8 bn
and is to be executed over a period of two and a half years.
Airport purchase plan dropped. Sobha confirmed that their plans to buy an airplane in a
consortium has been dropped and allayed investor concern on the same.
No quick land bank monetization which will largely be through development. Sobha has
land to develop 226 mn sq. ft which at current sales run rate of 3 mn sq. ft annually will
last if for 75 years. However, they do not intend to sell the land to monetize it quickly as
they believe (1) current land cost is Rs102 / sq. ft and unlikely that one will be able to get
land at this rate for development, (2) it takes 4-5 years to reach building stage once land
has been identified and (3) 70% of the land is in areas where some development has
already happened.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
SOBHA DEVELOPERS: Key takeaways
Residential business remains steady. Sobha mentioned that prices are stable and their
launch calendar remains intact. Sobha Elysium is the largest pipeline project in Bangalore
with 2.9 mn sq. ft of mixed-use residential development.
Gurgaon launch will determine FY2012E. Sobha mentioned that they are gearing up for
launching Gurgaon which is 51% of total area that Sobha intends to launch over the next
few quarters. They are conscious of this being their entry in Gurgaon and intend to go all
out to ensure its success.
Contractual business. Sobha has approx. 13 mn sq. ft of construction almost equally split
between current execution and order book. Total order book outstanding is over Rs8 bn
and is to be executed over a period of two and a half years.
Airport purchase plan dropped. Sobha confirmed that their plans to buy an airplane in a
consortium has been dropped and allayed investor concern on the same.
No quick land bank monetization which will largely be through development. Sobha has
land to develop 226 mn sq. ft which at current sales run rate of 3 mn sq. ft annually will
last if for 75 years. However, they do not intend to sell the land to monetize it quickly as
they believe (1) current land cost is Rs102 / sq. ft and unlikely that one will be able to get
land at this rate for development, (2) it takes 4-5 years to reach building stage once land
has been identified and (3) 70% of the land is in areas where some development has
already happened.
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