Buy Sobha Developers – TP Rs.275 - Geojit BNP Paribas Financial Services Limited

Revenue for 3QFY12 at Rs.320 crore is down 13% yoy and 5% up qoq. Revenue was lower than analysts' estimates because of slower than expected execution of projects.

EBITDA margin at 24.6% was better than market expectation of around 20%.

Reduced debt by Rs.800 million during the quarter.

Delivery target has reduced to 4.5 million sq ft from 5 million sq ft.

Contracted sales during the quarter at 0.82 million sq ft is up 16% yoy but lower 12.5% qoq. Quarterly decline is due to the absence of any major launch in the quarter.

Revenue from the Forest View project at Rs.300 million and PAT at Rs.55 million.

Average cost of debt at 13.98%. The company would take at least 2-3 quarters to achieve its net debt/ equity target of 0.5 multiple.

New launches in 4QFY12 are expected to total 1.8 million sq ft in Bengaluru, Chennai, Coimbatore.

Price realization ex NCR was up 2% qoq and 16.5% yoy.

9 months FY12 sales at 2.42 million sq ft.

Source : Equity Bulls

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