Sobha lost 2.73% to Rs 488.80 after the company's consolidated net profit slumped 64.7% to Rs 17.90 crore on 39.2% rise in net sales to Rs 553.40 crore in Q4 March 2021 over Q4 March 2020.
Profit before tax tanked 82.1% to Rs 14.60 crore in Q4 FY21 as against Rs 81.40 crore in Q4 FY20. The Q4 earnings were announced after trading hours yesterday, 22 June 2021.
The company said it was able to clock best ever sales performance during Q4-21 and FY-21. The ongoing second wave of COVID-19 and intermittent localised lockdowns have slowed the economic activities during Q1 of FY-22, however the residential real estate sector is expected to bounce back earlier due to inherent demand in housing, work from home concept, better affordability and low interest rate regime.
Managing cash flows efficiently during these turbulent times is critical. Sabha focused on doing so during FY 20-21 and managed to do so efficiently due to self-reliant business model, optimum utilization of resources, use of technology, cost effective measures, customer trust and brand equity, it added.
On the financial performance, during FY21, the real estate revenues were lower due to IND AS115 revenue recognition methodology followed by Sobha under which, revenues are recognised on unit handover after 100% project completion. The cumulative sales done in residential business as on 31 March 2021 there is a balance revenue of Rs 6,783 crore to be recognised in the books of accounts which gives good visibility of revenue recognition in the coming years.
Contractual and manufacturing revenues during FY21 were lower due to COVID-19 impact, however the same is expected to improve with an order book of Rs 2,069 crore as on March 2021. Margins have remained healthy due to cost saving done across all project costs parameters adopted by the company, along with sales & marketing functions being optimised.
The EBITDA for the Q4 FY21 stood at Rs 116 crore while margins were at 21%. The real estate recorded a cash inflow of Rs 715 crore during Q4 FY21, its highest ever since inception. Net operating cashflow of Rs 236 crore and Rs 640 crore during Q4 FY21 and FY21 respectively. The company generated a net positive cash flow of Rs 123 crore during Q4 FY21 which is the highest in the last 11 successive Quarters. Net debt has reduced by Rs 171 crore as on March 2021 as compared to March 2020.
The price realization of Rs 8,014 per square feet (super built up area) achieved during Q4 FY21 is the highest price realization achieved by the company amongst eight quarters. Sobha has planned future launches to the tune of 13.35 million square feet in the coming quarters across various cities are expected to enhance our sales performance in the coming years.
Ravi PNC Menon, the chairman of Sobha, said, "Our improved sales numbers for FY 20-21 show our resilience and strong business fundamentals, even in a year affected by the pandemic. Although Bangalore was the biggest contributor, cities like Gurugram, Kochi, Thrissur and Pune were also able to improve their contribution to overall sales. Sobha made significant progress in its debt reduction efforts due to stronger cash flows and a decline in interest rate on our borrowings in recent quarters. We have also been able to improve our average price realization over last several quarters."
"The increase in overall sales combined with higher free cash flows will strengthen our capabilities to cater to the burgeoning Indian urban housing demand. In addition, our unique self-reliant business model enables us to utilize our resources optimally and ensures timely delivery of projects with unmatched quality. This consistent focus on quality has helped us in building a stronger brand and customer loyalty. In line with our growth strategy, we have lined up new launches in the existing cities along with expansion to newer geographies, in the coming quarters. This will further improve our stance in India's realty landscape."
Sobha said its superior execution capability is its core strength. The company currently has ongoing real estate projects aggregating to 30.11 million square feet of developable area and 21.90 million square feet of saleable area, and ongoing contractual projects aggregating to 5.64 million square feet under various stages of construction.
As on 31 March 2021, the company has delivered about 112.30 million square feet of developable area. The company has a real estate presence in 10 cities, viz. Bengaluru, Gurugram, Chennai, Pune, Coimbatore, Thrissur, Kozhikode, Kochi, Gujarat (Gift City) and Mysore. Overall, Sobha has footprint in 27 cities in 14 states across India.
Meanwhile, the board has recommended dividend of Rs 3.50 per equity share.
During the financial year, Sobha's consolidated net profit dropped 77.86% to Rs 62.30 crore on 43.79% decrease in revenue from operations to Rs 2,109.80 crore in FY 2021 over FY 2020.
Sobha is a real estate player primarily focused on residential and contractual projects.
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