The stock of Bengaluru-based real estate developer, Sobha, rose nearly 5 per cent as the company has registered good sales in the first quarter of FY19. During this period, the company reported sales volume and value growth of 18 per cent and 22 per cent year-on-year, respectively.

The company primarily operates in residential segments with a presence in luxury, super luxury and affordable housing properties. It also develops commercial properties and provides contractual services such as civil, electrical, interior and landscaping. The company has presence in cities, including Gurgaon, Chennai, Kochi, Thrissur, Coimbatore and Pune.

While the company’s core operations in Bengaluru contribute nearly 64 per cent of the total sales volume, it had registered a single-digit growth of about 3 per cent year-on-year in this region. However Mysuru, Kochi, Thrissur and Coimbatore reported strong growth, albeit on a smaller base in the first quarter of FY19. This is a continuation of the trend seen in the previous quarters of fiscal 2018.

While the overall average price realisation (price per square feet) of the company has grown about 4 per cent y-o-y in Q1, if joint developments are excluded, average price realisation has fallen about 8 per cent y-o-y in the recent quarter. This could be attributed to relatively lower pricing power in its own projects vis-a-vis joint developments.

As for the financial performance, revenue and profit grew about 31 and 42 per cent y-o-y for the March quarter of FY18, thanks to recovery in real estate markets in regions such as Bengaluru and Chennai. Going ahead, the firm expects further pick-up in the residential market and is planning to launch new projects. The company has received RERA approvals for its projects in Mysuru and Bengaluru.

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