Expect EBITDA margins to be better than last 3-years: Sobha Developers

JC Sharma

VC | Sobha

• Expect EBITDA margins to be better than last 3-years: Sobha Developers

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Sobha gained nearly 7 percent in trade after the company posted a good set of pre-sales despite sluggish demand. The pre-sales for the second quarter were up 14.4 percent at Rs 592 crore versus Rs 518.2 crore for the same month last fiscal.

The sales volumes too were up 0.6 percent at 0.86 msf versus 0.85 msf YoY.

The company posted sales value which was highest in the last three years, said JC Sharma, Vice Chairman & MD, Sobha. This tells us that even while the macro environment was sluggish, if one were to focus on marketing and believe that underlying demand will be there, one will do succeed, he said, adding that this has taken place in all their markets in the last 9 months.

However, he also said that the macro level challenges for the real estate sector continue and it will take time for developers to transit to RERA, GST, post-demonetisation world. The customers are far more demanding and have greater bargaining power, he said. The customers are also taking more time to convert enquiry into buying, said Sharma.

"So although it is remains a difficult market but at the end of the day you see the number of enquiries are high," he said.

On the business outlook front, he said the EBITDA margins will be better than the last three years and the revenues too will be good. Moreover, company will be one of the beneficiaries of the goods and services tax (GST) transition, which will help aid their margins, said Sharma.