Sobha Ltd. saw its shares drop by 2.86% to ₹1,691.90 after the company released its operational update for Q2 FY2025, revealing a significant decline in sales and realisations. The real estate developer faced a challenging quarter, with both sales volumes and price realisations taking a hit.
Key Highlights from Q2 FY2025:
- Sales Volume Decline: Sobha sold 0.93 million square feet (mn sft) of new area in Q2, down by 27.5% compared to the 1.17 mn sft sold in Q1 FY2025.
- Total Sales Value: The total sales value for the quarter stood at ₹1,179 crore, a decline from ₹1,873 crore in the previous quarter.
- Price Realisation: The average price realisation per square foot dropped by 20.4% quarter-on-quarter, falling from ₹15,941 in Q1 FY2025 to ₹12,674 in Q2.
- Regional Performance: Kerala stood out with its best-ever sales quarter, contributing ₹338 crore, while Bengaluru continued to be a significant market for the company, contributing ₹696 crore, though with a decline in new sales area to 0.42 mn sft.
Reasons for the Decline:
The sharp fall in sales and price realisations is attributed to changing market conditions and project-specific factors. Sobha also saw slower sales momentum in some regions, which affected its overall quarterly performance. Despite these challenges, the company continues to focus on key markets such as Bengaluru, Kerala, and Tamil Nadu.
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Sobha