Sobha Developers Ltd- Real Estate Company SWOT Analysis
Strengths
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Sobha
Developers Ltd
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Key Personnel
(Source:
Company website)
Contact Details
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- Substantial regional development operations based in Bangalore.
Weaknesses
- Relatively high debt levels, although it has taken steps to address this.
- High exposure to regional downturns that have been severe in parts.
Opportunities
- Ideally placed to benefit from renewed growth in India. It can be expected to benefit from various stimulus spending measures.
Threats
- Bangalore in particular subject to foreign economic trends, which could put a dampener on economic growth there.
Company
Overview
Sobha
is one of India's largest construction companies. Its initial public offering
(IPO) in 2006 was oversubscribed by 126 times.
It
is an industry leader in Bangalore, where it is based, but also operates in
Kerala, Andhra Pradesh, Orissa, Tamil Nadu, Punjab, Harayana and Maharashtra.
It undertakes both commercial and residential projects.
The
company reports that it believes there have been clear signs of a revival in
demand in the real estate industry. With the economy growing at 6-7% a year,
and expected to achieve a higher growth rate in the next couple of years, real
estate industries are poised to play a significant role. It will be a
domestic-driven industry, growing at a much faster pace.
Projects
By
June 30 2009 Sobha Developers had completed 50 residential/commercial in-house
projects and 146 contractual projects covering 31.9mn sq ft of built-up space.
It had 31 residential/commercial ongoing projects totalling 9.2mn sq ft.
Financial
Highlights
Sobha
Developers has reorganised debt, bringing on board a private equity partner and
successfully completed a qualified institutional placement (QIP) raising
INR5bn.
In
January 2010, the company announced discussions were being held to raise INR3bn
at project levels. This would be the second major fund raising Sobha Developers
has undertaken, after it raised INR2.25bn in H209 from a fund sponsored by
Infosys co-founder NS Raghavan. It seems that the company, which has a land
bank of 3,000 acres, has been taking these steps to reduce its leverage on debt
and it has managed to bring down the ratio to 0.8 from a peak of 1.6 on a debt
of close to INR19bn. The company's financial year ends on March 31.
Sobha
was badly affected by the aftershocks of the global financial crisis and
reported a dip in profit in Q110 to INR127mn, compared with INR505mn in Q109.
Q1 net profit rose by 76.4% quarter-on-quarter to INR127mn, while total income
was up 15.6%.
- Total revenue: INR14,226mn (fiscal year ending March 31 2008);
- Net profit: INR2,283mn (fiscal year ending March 31 2008).
