Hubtown soars 6.5% despite no sales in last two months

The company’s all sites were completely shut down from March 22, 2020 due to lockdown after Covid -19 Pandemic.

Jun 09, 2020 03:06 IST India Infoline News Service

Mumbai based real estate company Hubtown Limited had no sales during the months of April and May. It expects the condition will improve only little in the next quarter.

“Profitability for the year 2020-2021, may get severely affected due to disruption in operations, reduced sales, cancellation of sales, mounting interest costs, downward valuation of inventory etc. The combined effect may see losses being reported in the current year,” the company said in its filing for exchanges on Tuesday.

The company’s all sites were completely shut down from March 22, 2020, due to lockdown after Covid -19 Pandemic. Subsequently, the labour has migrated to its native place thereby leading to uncertainty on resumption of operations. All these factors will ultimately lead to delay in completion of projects and handing over of possession of units to customers.

The company is uncertain as of now about resumption of operations, as most of the sites are based at Mumbai, where unlock is only nominal till June 30, 2020.

Though the company is looking at avenues to raise funds, there is concern on the liquidity position of the company.

“NBFC and Banks are not looking at real estate sector for funding and that is going to cause further stress on liquidity position. Severe pressure on liquidity position due to no sales and slowed down recovery, may require company to indulge in sales on differed payment basis and that too at distress prices.”

Hubtown Ltd is currently trading at Rs12.61 up by Rs0.77 or 6.5% from its previous closing of Rs11.84 on the BSE.

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