Sobha Developers : Debt Rises on Land Payments
Reco : Hold Cmp : 363 Target : 359
Sobha reported sales of 0.95 msf in Q2 (0.84 msf in Q1) totaling Rs 5.3 bn its best quarter yet. With 10 new launches planned over next 4 quarters, we believe Sobha is on track to achieve its FY13 sales guidance of 3.75 msf totaling Rs 20 bn.
Sobha spent ~Rs 1.1 bn towards land acquisition in Q2 mainly comprising (1) payments made towards 10-acre land in Devanahalli, Bangalore, (2) Rs 500 mn towards 5-acre land in Bangalore (JV with SUN AREA), and (3) advances paid towards MoU (Chennai) and lease agreements. Consequently, net debt increased to Rs 12.9 bn (Rs 11.8 bn in Q1).
Other highlights
Sobha declared consolidated revenue of Rs 4.1 bn (down 4% QoQ), EBITDA at Rs 1.3 bn (up 7% QoQ), and PAT at Rs 501 mn (up 11% QoQ) in Q2FY13 were in line with our expectations.
Revenue break-up Real estate: Rs 3.1 bn, land sales: ~Rs 64 mn, and contractual + manufacturing: Rs 984 mn. Read detailed report
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