Sobha Ltd, South based real estate company primarily focusing on residential assets, expects to put up much better performance in the second quarter. According to the company, enquiries are getting back to normalcy indicating revival of the demand. However, conversions are taking longer due to the ongoing lockdown.
Meanwhile, in 1QFY21, Sobha has achieved 0.65m sqft (worth Rs490 crore) of new bookings (with flat realisations), implying a 65% run-rate. In another interesting development, post Covid, the sales mix is seen skewing towards larger homes, given the need to work from home. Also, the 1.9m sqft of probable cancellations seen during COVID breakout is now confirmed.
Speaking about the performance Mr. J.C. Sharma, Vice Chairman and Managing Director, SOBHA Limited said, “Company was also able to use various augmented reality and virtual reality tools to enhance customer experience. With more and more companies opting for work from home, inherent demand for better quality homes, low interest rates and other benefits extended by government, demand is likely to sustain in the coming quarters and organized players are expected to perform better.”
The company also has a contractual business for office space development, with contracts from large corporates like Infosys, Biocon, etc. However, billing for Infosys has slowed down, partly impacting the outlook for the contractual business for FY21. According to the management, other major contracts remain on track. Meanwhile, labour availability, which had impacted badly due to reverse migration of migrant workers, is showing signs of improvement and stands at 60% of the normal. Also, the company has lined up new launches of 15m sqft. However, their calibration is contingent on both, demand and availability of labour.