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Sobha has released its operational update for 1H ahead of the Sep-Q
results. Sep-Q has been a surprisingly strong Q for the company with it
achieving its highest ever pre sales of Rs 4.8B vs. Rs3B run rate for the
last few quarters (and this done in a supposedly seasonally weak Q). This
was aided by new launches of 3-4 msf in 2Q and its high realization
Gurgaon launch. Even as sales trends in core Bangalore market were
largely stable, new market diversification in NCR, Mysore and Pune has
helped. With 1H pre sales at Rs 7.9B, the company has now achieved
~53% of its rather aggressive full year guidance (Rs15B, 3-3.5msf for
FY12). An exceptionally high average realization of Rs 5200psf, however,
may not sustain ahead (which was aided this Q by Gurgaon launch).
Key highlights of 2Q operations -
Pre sales - 2QFY12 bookings improved meaningfully to 0.9msf/Rs4.9B
vs. quarterly run rate of 0.7msf/Rs3B for the last few quarters. This takes
the 1HFY12 sales bookings to Rs7.9B/1.6msf, up 48% Y/Y. This was
aided by 30% increase in average pricing (at Rs4926psf) driven by
Gurgaon launch (though not a sustainable pricing medium term). In
terms of geographies, Sobha’s traditional home markets Bangalore
(70%) and Thrissur (11%) accounted for ~80 of the overall bookings;
while NCR launch (key new market) has also seen an encouraging
response (0.1msf sold). Around 11% of total bookings came from NCR.
Launch activity has been fairly high with ~8msf launched in 1HFY12.
Of the total, 1.2msf was launched in Bangalore in 1H and 1.3msf was
launched in newer markets (NCR – 1.1msf, Mysore -0.2msf). Overall the
company is looking to launch another 3-4msf in 2H thereby sticking to
its initial full year launch target of 11-12msf for FY12.
FY12 guidance of Rs16B appears achievable – Company maintained
its full year sale guidance of Rs15B for FY12. The company has already
achieved 53% of its full year guidance (Rs15B) and over 60% of our full
year estimate (JPMe – Rs12.4B for FY12).
Sales trends from Bangalore developers continue to surprise
positively- Sobha’s latest pre sales update follows an equally impressive
update from Prestige (Rs 9.5B pre sales done in 1H , Rs 7B done in 2Q)
and new launches done by Brigade. As of now, B’lore has seen
improving demand trends aided by increased wage growth and IT hiring
activity. However if current macro takes a toll on IT growth, there could
be a concomitant effect on RE sales as well.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sobha has released its operational update for 1H ahead of the Sep-Q
results. Sep-Q has been a surprisingly strong Q for the company with it
achieving its highest ever pre sales of Rs 4.8B vs. Rs3B run rate for the
last few quarters (and this done in a supposedly seasonally weak Q). This
was aided by new launches of 3-4 msf in 2Q and its high realization
Gurgaon launch. Even as sales trends in core Bangalore market were
largely stable, new market diversification in NCR, Mysore and Pune has
helped. With 1H pre sales at Rs 7.9B, the company has now achieved
~53% of its rather aggressive full year guidance (Rs15B, 3-3.5msf for
FY12). An exceptionally high average realization of Rs 5200psf, however,
may not sustain ahead (which was aided this Q by Gurgaon launch).
Key highlights of 2Q operations -
Pre sales - 2QFY12 bookings improved meaningfully to 0.9msf/Rs4.9B
vs. quarterly run rate of 0.7msf/Rs3B for the last few quarters. This takes
the 1HFY12 sales bookings to Rs7.9B/1.6msf, up 48% Y/Y. This was
aided by 30% increase in average pricing (at Rs4926psf) driven by
Gurgaon launch (though not a sustainable pricing medium term). In
terms of geographies, Sobha’s traditional home markets Bangalore
(70%) and Thrissur (11%) accounted for ~80 of the overall bookings;
while NCR launch (key new market) has also seen an encouraging
response (0.1msf sold). Around 11% of total bookings came from NCR.
Launch activity has been fairly high with ~8msf launched in 1HFY12.
Of the total, 1.2msf was launched in Bangalore in 1H and 1.3msf was
launched in newer markets (NCR – 1.1msf, Mysore -0.2msf). Overall the
company is looking to launch another 3-4msf in 2H thereby sticking to
its initial full year launch target of 11-12msf for FY12.
FY12 guidance of Rs16B appears achievable – Company maintained
its full year sale guidance of Rs15B for FY12. The company has already
achieved 53% of its full year guidance (Rs15B) and over 60% of our full
year estimate (JPMe – Rs12.4B for FY12).
Sales trends from Bangalore developers continue to surprise
positively- Sobha’s latest pre sales update follows an equally impressive
update from Prestige (Rs 9.5B pre sales done in 1H , Rs 7B done in 2Q)
and new launches done by Brigade. As of now, B’lore has seen
improving demand trends aided by increased wage growth and IT hiring
activity. However if current macro takes a toll on IT growth, there could
be a concomitant effect on RE sales as well.
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