Sobha Ltd. sold more residential units in the first quarter even as average price realisations declined.
Sales volume of its residential units jumped 11 percent in the quarter from 0.96 million square feet to 1.06 million square feet on a yearly basis, the Bengaluru-based real estate firm said in an exchange filing. The city contributes almost 80 percent to the company's total revenue.
The company's share in total sales value increased 8 percent to Rs 660.6 crore in the first quarter, according to its filing.
Average price realisation, however, fell 8 percent to Rs 7,312 per square feet due to change in product mix across various projects, the real estate developer said.
Still, Deutsche Bank remains optimistic. Bengaluru is one of the best placed residential markets in India, Bijay Kumar, research analyst at the brokerage, wrote in a note last month. The developer, he had said, is expected to gain market share in a consolidating market with a strong demand in housing units in the range of Rs 1-2 crore segment continuing in financial year 2020.
The company launched a total of 0.61 million square feet of projects during the quarter and also entered in a joint development agreement for residential development in Hyderabad, according to its exchange filing.
Shares of Sobha rose 1.51 percent on July 4 compared to a 0.91 percent jump in the Nifty Realty Index. 92 percent of analysts have a ‘Buy' rating on the stock, while the 12-month return potential stands at 6.3 percent, according to Bloomberg Data.
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