Sobha (SOBHA) Q4 06/07 earnings summary

Executive summary

• FY07 revenue rose 90% YoY to Rs. 11,894 million; PAT increased 82% to Rs. 1,615 million, with growth across real estate and contractual construction.

• Backward integration, quality controls and timely execution supported growth; operations covered 39 residential projects and 97 contractual projects by March 31, 2007.

Financial highlights

• Sales and other income reached Rs. 11,894 million, up 90% YoY; operating profit grew 85% and PBT increased 75% to Rs. 1,866 million.

• PAT was Rs. 1,615 million versus Rs. 885 million, up 82%; diluted EPS rose 90% to Rs. 24.26 from Rs. 13.84.

• PBDIT was Rs. 2,591 million versus Rs. 1,404 million; finance charges rose to Rs. 481 million from Rs. 208 million.

• The Board recommended a final dividend of Rs. 5.50 per equity share for FY07, subject to shareholder approval.

Outlook and guidance

• Phase I plans target launches in eight additional Indian cities over the next 12 months; land has been procured and projects are being prepared.

• Phase II plans call for entering five more cities over the following two years, with an ambition to become a national player.

• Planned capacity investments include large-area precast concrete manufacturing and new facilities in Pune, Chennai and Cochin; skilled-workforce development is supported by the Sobha Training Academy.