Sobha (SOBHA) Q4 10/11 earnings summary

Executive summary

• FY11 was a year of consolidation and growth: standalone revenue reached ₹14,643.15 million, up 30.82% YoY, while net profit after tax rose to ₹1,824.61 million from ₹1,366.62 million.

• Operating cash flow of ₹4,143.60 million supported ₹2,430.70 million of net debt reduction; debt/equity improved to 0.65 from 0.85.

• Completed and handed over 4.12 million sq. ft. of residential space and delivered 2.20 million sq. ft. of contractual projects; 11.48 million sq. ft. of contractual orders were confirmed.

Financial highlights

• Standalone net sales and other income were ₹14,643.15 million vs ₹11,192.83 million; consolidated revenue was ₹14,813.32 million vs ₹11,337.23 million.

• Standalone PBT rose to ₹2,435.97 million from ₹1,602.71 million; PAT was ₹1,824.61 million vs ₹1,366.62 million.

• Consolidated PBT was ₹2,514.18 million vs ₹1,657.91 million; profit after minority interest and associate share was ₹1,812.92 million vs ₹1,340.97 million.

• Standalone proposed dividend was ₹3 per ₹10 equity share, a 30% rate; ₹183 million was proposed for transfer to general reserve.

Outlook and guidance

• Target debt/equity ratio is 0.50–0.60 by the end of FY12; management expressed confidence in achieving it.

• Planned development launches total 11 million sq. ft. for the next year, with over 90% in residential; planned priorities include NCR, Pune and Coimbatore.

• Plans include entering newer geographies, increasing contractual business and factory utilization, and pursuing sustainable growth, consistent margins and improved cash flow.