Real estate developer Sobha saw an 85.55% decline in net profit for Q4 FY24, totaling INR 7.02 crore, with total income dropping by 36.20% to INR 791.25 crore. Despite these setbacks, Sobha remains committed to growth and resilience. The board recommended a dividend of INR 3 per share (totaling INR 54.36 crore), demonstrating confidence in long-term prospects. Sobha also reduced net debt significantly over 14 quarters, achieving a debt-to-equity ratio of 0.50. Strategic moves include a 51% stake acquisition in C.V.S Tech Park and a planned rights issue to raise up to INR 20,000 million.
Real estate developer Sobha reported a decline in its net profit for the quarter ending March 31, 2024. However, the company is taking proactive steps to navigate this challenging market environment.
Net profit for Q4 FY24 fell by 85.55% compared to the same period last year, reaching INR 7.02 crore. Total income also dipped by 36.20%, down to INR 791.25 crore. Despite these setbacks, Sobha remains committed to growth. The board of directors has recommended a dividend of INR 3 per share for the financial year (totaling INR. 54.36 crore based on issued share capital), demonstrating confidence in the company's long-term prospects.
Sobha is also taking steps to strengthen its foundation. Vikram Kumar has been appointed as Executive Vice President of Legal and Land Purchase, bringing valuable expertise to the team. Furthermore, the company has significantly reduced its net debt over the past 14 quarters, with a debt-to-equity ratio of 0.50 in Q4 FY24. This improved financial health positions Sobha for future investments and growth. In fact, their net debt has been reduced by a staggering INR 17.88 billion over this period, showcasing a commitment to financial stability.
Looking ahead, Sobha is focused on strategic acquisitions. In February 2024, they acquired a 51% stake in C.V.S Tech Park for an undisclosed amount, which has since become a wholly-owned subsidiary. This move expands their portfolio and strengthens their presence in specific market segments.
Additionally, the board has approved the issuance of new equity shares to eligible shareholders through a rights issue, potentially raising up to INR 20,000 million. These funds can be used to fuel further acquisitions and development projects.
While the short-term financial results may be lower than expected, it's important to consider Sobha's full-year performance. For FY24, they achieved an annual sales value of INR 66.44 billion, collections of INR 57.9 billion, and new area sales of 6.08 million sq. ft. The average price realization for their properties was INR 10,922 per sq. ft, indicating continued demand for their projects.
Sobha's strategic approach to team building, debt reduction, targeted acquisitions, and a solid full-year performance position them well to weather the current market conditions and emerge stronger in the long run.
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