Sobha Limited: Builder Overview

 

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Builder Overview: Sobha Limited is among the most admired and trusted builders in India with strong presence in Bangalore, Chennai, Pune, Coimbatore and NCR. The builder is also registering international presence which includes the GCC nations.
Along with residential sector, Sobha also has a strong presence in other industry verticals such as commercial and retail. Not to mention manufacturing of interiors and other building related activities.

Performance Overview: Since its inception Sobha has successfully executed near around 350 projects comprising of a total land area of 66 million sqft. It has presently over 100 ongoing projects capturing 40 million sqft. As a builder Sobha is ISO 9001 certified with over 140 international, national and regional awards in its kitty. Over the recent past, Sobha as an organization has made considerable progress in terms of escalating its overall project volume.

As headquartered in Bangalore, the silicon valley of India is one of its key locations in terms of business. In addition, the developer has strong presence in numerous other South Indian cities such as Chennai, Cochin and Mysore etc. The developer has also rapidly expanded its business into Central India, North and international market in the recent past.

Sobha is also touted for being the only backward integrated developer in the Indian real estate market, as the company is engaged in the manufacturing and construction of concrete, glazing and metal works thereby enabling it to adhere to higher quality standards.
Financial Health Overview: On the backdrop of a strong brand name integrated with successful projects, the organization is intercepting a robust financial performance. Previous year, its credit rating has been upgraded to A (stable) from A- (stable). Its financial performance is touted as to be higher than the overall industry standards.

11 Figure 1: PBT in the last 5 years

According to the latest financial available, for the financial year 2014, Sobha made a total revenue of INR 22,000 million with a Y-o-Y increase of 16.77%. The Compound Annual Growth Rate (CAGR) of revenue collected for Sobha over the last 5 years has been near around 20% . The net Profit before Tax (PBT) registered has been INR 3705 million, registering a Y-o-Y increase of 14.4%. The CAGR of PBT has been 15% in the last five years.

The Profit after Tax (PAT) has been INR 2350 million for the FY 2014. The Debt Equity Ratio has been relatively less at 0.54, adding further strength to the overall financial strength of the company. As of the Financial Year (FY) 2014 the overall debt of the company has been registered at INR 12,342 million, considerably down form INR 19,100 million in the year 2008-09.
Mentioned below is the stock market performance of the Sobha Property in 2014, on the National Stock Exchange (NSE).

Figure 2: Sobha’s stock performance in NSE in 2014 Figure 2: Sobha’s stock performance in NSE in 2014

Present Popular Projects: Sobha is presently involved in multiple projects in Bangalore and numerous other Indian cities. Some of its present properties, which are attracting strong investor interest in Bangalore , encapsulate Sobha Green Acres, Sobha Arena, Sobha City and Sobha Silicon Oasis. Likewise its popular projects in Pune involve, Sobha Orion, Sobha Carnation and Sobha Elanza etc.

Customer Feedback: At Kin Housing we have successfully sold numerous Sobha properties in the recent past. Based on our interview with various customers, it has been indicated that Sobha is known for its state of the art technological touch which it brings into its projects. Its higher quality standards also emanate out of its backward integration. It is one of the trusted brand names and is known for successfully executing its projects within time.

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