(Reuters) – Indian homebuilder Sobha reported a bigger third-quarter profit on Thursday as higher sustenance sales, or sales of remaining houses from existing projects, cushioned the impact of fewer new project launches.
The company’s consolidated net profit increased 44% to 216.9 million rupees ($2.5 million) in the October to December quarter. Revenue rose 79%.
Sobha’s sales by area dropped 39% in the quarter, including by 42% in its mainstay market of Bengaluru, which accounted for 71% of total new area sold.
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KEY CONTEXT
Sobha and fellow Bengaluru-focussed rival Prestige Estates launched fewer projects in the quarter due to delayed approvals from the Real Estate Regulatory Authority (RERA), analysts said.
While Prestige reported an 85% slump in profit for the quarter, Brigade Enterprises said its profit more than trebled.
Broadly, India’s real estate sector has benefitted from sustained demand for premium apartments as affluent consumers, unfazed by high borrowing rates, look to upgrade their lifestyle beginning with their homes.
PEER COMPARISON
Valuation (next Estimates (next 12 Analysts’
12 months) months) sentiment
RIC PE EV/EBITDA Revenue Profit Mean No. of Stock to Div
growth (%) growth (%) rating* analyst price yield
s target** (%)
Sobha 25.38 15.01 22.61 116.24 Buy 13 0.65 0.23
Brigade Enterprises 34.45 17.55 17.47 28.02 Strong 10 0.80 0.17
Buy
Prestige Estates 44.21 17.04 26.12 32.01 Buy 16 0.75 0.13
Projects
* The mean of analyst ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell ** The ratio of the stock’s last close to analysts’ mean price target; a ratio above 1 means the stock is trading above the PT
OCTOBER-DECEMBER STOCK PERFORMANCE
— All data from LSEG — $1 = 87.5570 Indian rupees
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Savio D’Souza)
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