Sobha Ltd – robust revenues driven by real estate segment

News: Sobha’s sales volume of 13,48,864 sq ft (up 51.2% YoY and up 30% from pre-Covid – Q2FY20) during Q2FY22 valued at Rs.1030.2 crore (up 49.3% YoY), were primarily driven by good sale numbers achieved in Bengaluru, Gurugram, Pune and GIFT CITY. On financial front, reported revenues were up 57% YoY at Rs.819 crore, driven by strong real estate revenues recognition (up 96% YoY at Rs.654 crore). EBITDA at Rs.155.8 crore, was up 24.5% with margins of 19%, down 500 bps YoY. PAT at Rs.45.4 crore was up 167% YoY.

Views: The strong sales volumes is indicative of robust end user demand amid IT sector tailwinds. While sales volume recovery is positive, key monitorable will debt-equity of the company (at ~1.13x as on FY21) which needs reduction for rerating.