Sobha (SOBHA) Q1 25/26 earnings summary

Executive summary

• Achieved record real estate sales in Q1 FY26, surpassing INR 2,000 crores (₹20.79 bn), with 1.44 million sq ft sold and 806 homes delivered, marking 23% YoY growth in sales area and 11% YoY growth in sales value.

• Expanded operational footprint to 12 cities, including entry into Greater Noida with the launch of Sobha Aurum, which sold 80% of inventory by quarter-end.

• Net debt turned negative at (₹6.87 bn), with a net debt to equity ratio of (0.15), reflecting a strengthened balance sheet.

• Board approved a dividend of ₹3 per equity share, ratified at the AGM on 24 July 2025.

• Received multiple awards, including Builder of the Year - Large and Excellence in Residential Project Development.

Financial highlights

• Total income for the quarter was ₹9.01 bn, up 34.6% YoY; real estate income contributed ₹6.90 bn, contracts and manufacturing ₹1.62 bn.

• EBITDA stood at ₹0.73 bn (8.1% margin); PAT was ₹136.18 mn (1.5% margin), impacted by delayed revenue recognition in Bangalore.

• Operational cash inflow reached ₹17.78 bn, up 14.9% YoY; net cash flow for the quarter was ₹0.57 bn.

• Gross debt at ₹10.19 bn; average interest cost reduced to 8.86%.

• Dividend payout of ₹3 per share approved for FY25.

Outlook and guidance

• Guided for a 30% increase in pre-sales over last year, targeting INR 10,000 crores in the subsequent year.

• Plans to launch 6–8 mn sq ft of forthcoming projects in the remainder of FY26, with inventory visibility at 18.38 mn sq ft.

• Projecting realization of ₹181.74 bn in future cash inflows from ongoing/completed/forthcoming projects.

• Operational cash flow for the full year expected to increase by 10%.

• Management expects ongoing legal and regulatory matters will not have a material adverse impact.