BackSobha ends FY22 with record sales; price hikes key in FY23
While the company has ended FY22 with stellar performance, investors in the stock need to monitor the impact of cost inflation on sales and trajectory of price hikes going into FY23
PremiumBengaluru-based real estate developer Sobha Ltd. managed a robust performance in FY22 aided by the demand momentum for residential real estate projects despite the initial stumble because of the Omicron wave. The company saw highest ever sales of 4.91 million square feet (msf), up 22% year-on-year (y-o-y). In value terms, sales rose 23% y-o-y to ₹3,870 crore.
Region-wise, Bengaluru, Gurugram, Pune and GIFT City regions clocked highest ever sales volume during FY22, the company said in a press release. Sales Bengaluru, Gurugram, GIFT City and Pune regions during FY22 rose 24%, 83%, 150% and 77%, respectively, year-on-year.
As far as Q4FY22 performance is concerned, the company achieved total sales volume of 1.34 msf of super built-up area and highest ever realisation of ₹1,110 crore. "Due to consistent demand across all the product segments and price increase, we were able to achieve best ever price realization of ₹8,265 per square feet," said the press release.
During the quarter, the company launched ‘SOBHA Brooklyn Towers Wing 3’ residential project in Bengaluru.
It should be noted that Bengaluru remains a key market for the real estate developer, contributing 69% to total sales.
The company's management said cash flows were healthy during the fiscal fourth quarter, resulting in further net debt reduction. Also, the company's average cost of borrowing has came down during the quarter.
Reacting to this development, shares of the company rose around 3% on the National Stock Exchange in opening deals on Friday, but pared pared gains later on.
While the company has ended FY22 with stellar performance, investors in the stock need to monitor the impact of cost inflation on sales and trajectory of price hikes going into FY23. "We have improved the price realisation from past few quarters, which would act as margin protection against recent cost increase," added the press release.
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