Sobha’s Q1 net profit plunges 86% to Rs 7 crore as Covid hits business

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August 8, 2020 2:30 AM

The Bengaluru-headquartered company’s consolidated total income fell 61% Q-o-Q to Rs 359 crore in the April-June quarter.

“The quarter gone by has been the most unprecedented and challenging one so far,” Sobha said.“The quarter gone by has been the most unprecedented and challenging one so far,” Sobha said. (Representative image)

Real estate developer Sobha on Friday reported a steep 86% decline, sequentially, in its consolidated net profit at Rs 7 crore for Q1 FY21 as the company faced unprecedented challenges due to Covid-19 and the resultant economic slowdown.

The Bengaluru-headquartered company’s consolidated total income fell 61% Q-o-Q to Rs 359 crore in the April-June quarter. “The quarter gone by has been the most unprecedented and challenging one so far,” Sobha said.

The firm reported an ebitda of Rs 109 crore in Q1 FY21 and an ebitda margin of 30%. It clocked a pre-sales volume of 0.65 million sqft valued at `488 crore.

Vice chairman & MD J C Sharma said, “As we start FY21 in the middle of an unprecedented pandemic, we are pleased to inform that we have posted a better than industry average sales performance. This was backed by increased use of digital platforms and technology in our sales and marketing efforts, along with already existing self-reliant-model of construction operations.”

With more and more companies opting for work from home, inherent demand for better quality homes, low interest rates and other benefits extended by the government, demand is likely to sustain in the coming quarters and organised players are expected to perform better, he added.

The number of inquiries from customers are now almost back to the pre-Covid levels. Sobha achieved a total cash inflow of Rs 547 crore during the June quarter despite various operational challenges. It’s average borrowing cost also came down during the quarter and stands at 9.64% as of June.

At present, Sobha has ongoing projects aggregating to 38.52 million sqft (msf) of developable area and 26.81 msf of saleable area and ongoing contractual projects aggregating to 9.48 msf under various stages of construction. As of June, the company has delivered about 109.74 msf of developable area.

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