Sobha jumps over 6% after Q1 business update

Shares of Sobha jumped over 6% in Wednesday’s early trade after the company said it has achieved a total sales volume of 8,95,539 square feet of super built-up area valued at Rs 682.9 crore in Q1FY22 against 6,50,400 square feet of super built-up area valued at Rs 487.7 crore sold in Q1FY21.

The scrip traded 6.61% higher at Rs 523.35 at around 9.50 am (IST). On the other hand, the benchmark BSE Sensex traded almost flat at 52,864 at around the same time.

In a regulatory filing, the company said that the residential real estate sector has been showing encouraging signs of structural revival in the recent past with better preparedness and having already adapted to digital tools. The impact of the second wave was sudden, severe, prolonged, and visible in major metro cities, also in cities where Sobha operates and in rural areas.

“With our innate resilience we were able to not only withstand the pressures of the pandemic but were also able to maintain the momentum gained post the impact of the first wave of the pandemic,” Sobha said.

Though some uncertainties remain about the third wave and how and when it will strike, the company is confident about the Indian economy’s ability to bounce back.

“With rapid vaccination drive and removal of restrictions by the states, we believe we are on the recovery path. Covid has changed certain things. There have been some positive disruptions, especially for the services sector. A large number of people are getting used to concepts like – work from home, work near home, digitally-enabled spaces, and larger living spaces. Suddenly we see our lives centering around our own living spaces. This new reset is going to stay for long,” the real estate firm said.

It also believes that the role of organised players in the real estate sector will become more significant. Those who have been delivering high-quality homes, in time and with transparency will become more important.

At present, the housing sector is witnessing better affordability coupled with a low-interest rate regime, promotion of home loans by the banks and overall consolidation. These have helped push the demand for housing.

“The company was able to withstand the adverse impact of two successive pandemic waves and show its resilience in QlFY22. We were better prepared and had already adapted to the requisite digital tools. It is in this backdrop that our operational performance needs to be seen,” it added.