- 10 Aug 2022
- ICICIdirect Research
Debt reduction key positive for SobhaSOBHA - 453 Change: -66.70 (-12.85 %)
News: Sobha clocked Q1FY23 India business sales bookings worth Rs 1145.5 crore (up ~68 YoY) (Sales volume up 52% YoY at 1.36 mn sq feet) on a washout base which was impacted by second wave of covid and flattish QoQ.. On financial front, reported revenues were up 13.5% YoY at Rs 581.6 crore, driven by strong real estate revenues recognition (up ~25.7% YoY at Rs 473.6 crore) and PAT at Rs 13.7 crore was up 26.9% YoY. Sobha has managed to reduce its net debt position by Rs 227 crore QoQ basis and its net debt at the end of March’22 stood at Rs 2,110 crore (net D/E: 0.84x).
View: While robust sales volume on a washout base and debt reduction was key positive, we note that the company had shared a muted outlook guidance. It expects flattish sales volumes in FY23, while it would reassess its contractual business amid high inflation scenario.