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Sobha Developers Buy
Namaste India Conference Highlights
* Sobha indicated that the Indian real estate industry would face execution
challenges in the future considering the availability of manpower, engineering challenges for scaling up and increased pressure from customers for
early delivery.
* Residential and commercial demand would continue to be robust in Bangalore with growth in the IT sector. Currently, Sobha has construction
contracts for ~11.5msf (mainly Infosys) which would translate into new
employee addition of ~120,000.
* In FY12, debt repayment of INR5.5bn would be funded through
~INR2.5bn of operational cash, INR1bn of land sales and fresh debt.
* Sobha has developed 240 projects (excluding plot development) of c.
40msf to date which they indicate is the highest in the country. Presales
were ~2.1msf in FY10 and are likely to be ~2.7msf and ~3.5msf in FY11e
and FY12e respectively. Higher volumes of 0.8msf in FY12e would be driven
by launches in three new cities - NCR, Chennai and Mysore.
* Sobha expects to launch the strategically located NCR project, which is
near the airport (~8km) and Dwarka (~5km), in the next one month. The NCR
project has two land parcels of 152 acres and 20 acres for the development
of a township (villas) and group housing projects, respectively. It holds
~64% ownership in the township project under a joint development while
the group housing project is 100% owned. The average selling price of the
township and group housing project would be INR8,500/sf and INR3,500/
sf, respectively.
* Sobha expects the effective tax rate to increase to c. 33% in FY12 from
~25% at present.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sobha Developers Buy
Namaste India Conference Highlights
* Sobha indicated that the Indian real estate industry would face execution
challenges in the future considering the availability of manpower, engineering challenges for scaling up and increased pressure from customers for
early delivery.
* Residential and commercial demand would continue to be robust in Bangalore with growth in the IT sector. Currently, Sobha has construction
contracts for ~11.5msf (mainly Infosys) which would translate into new
employee addition of ~120,000.
* In FY12, debt repayment of INR5.5bn would be funded through
~INR2.5bn of operational cash, INR1bn of land sales and fresh debt.
* Sobha has developed 240 projects (excluding plot development) of c.
40msf to date which they indicate is the highest in the country. Presales
were ~2.1msf in FY10 and are likely to be ~2.7msf and ~3.5msf in FY11e
and FY12e respectively. Higher volumes of 0.8msf in FY12e would be driven
by launches in three new cities - NCR, Chennai and Mysore.
* Sobha expects to launch the strategically located NCR project, which is
near the airport (~8km) and Dwarka (~5km), in the next one month. The NCR
project has two land parcels of 152 acres and 20 acres for the development
of a township (villas) and group housing projects, respectively. It holds
~64% ownership in the township project under a joint development while
the group housing project is 100% owned. The average selling price of the
township and group housing project would be INR8,500/sf and INR3,500/
sf, respectively.
* Sobha expects the effective tax rate to increase to c. 33% in FY12 from
~25% at present.
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