Sobha continued to report strong volumes at 1 msf (up 20% YoY) in Q2 totalling Rs 7.4 bn (Sobha\u2019s share at `6.2 bn). It witnessed improved traction in key Bangalore market (led by continued momentum in ongoing projects) and Gurgaon market (led by increased marketing activities). We expect collec-tions to remain steady QoQ. Sobha pla-ns to launch its affordable housing proj-ect in Bellahalli, Bangalore (1.8 msf) in the festive season, which we believe will give strong impetus to volumes in Q3. In the long-term, we believe Sobha will be a key beneficiary of (1) industry consolidation due to RERA, (2) its concentration in Bangalore which continues to see strong job creation (steady commercial absorption adding 100k new employees annually) and (3) focus on affordable housing segment (given its suitable land bank of 204 msf). Pre-sales in key Bangalore market remain steady and contributed 68% to Q2FY19 pre-sales vs. 64% in Q1FY19. Sales momentum improved in Gurgaon, which saw the highest quarterly sales in 23 quarters at 0.13 msf (up 69% YoY). Kochi sales (down 80% YoY) were impa-cted on account of the recent floods in Kerala. Management highlighted the impact has normalised and the company is witnessing improved enquiries and sales momentum. Sobha launched \u2018Lake Garden\u2019 in Bangalore with saleable area of 0.9 msf in Q2, and has plans for launches in North Bangalore (including affordable housing project in Bellahalli) as well as GIFT City during the second half of the year. Land payments towards residential development at GIFT city (`5 bn investment) continued in Q2FY19 and will be paid in equal quarterly installments across the next four years. Sobha plans to launch this project in Q3FY19.Average realisation fell to `5,977 psf (vs. `6,373 psf in Q1FY19) on change in product mix (higher share of sales at JDA projects).