Sobha (SOBHA) Q2 24/25 earnings summary

Executive summary

• Achieved H1 FY25 real estate sales of INR 30.52 billion, with Bengaluru contributing 40–40.5% and the rest of India 60–59.5%; Q2 FY25 sales were INR 11.79 billion.

• Kerala posted its best-ever quarterly and half-yearly sales, with a 32% YoY increase in average price realization; Tamil Nadu sales doubled sequentially.

• Launched five projects totaling 3.5–3.53 million sq ft in H1 FY25, with a strong pipeline of 19.29 million sq ft residential and 1.19 million sq ft commercial projects for the next 6–8 quarters.

• Q2 FY25 consolidated revenue was INR 16.49 billion, up 25% YoY; H1 FY25 revenue was INR 16.35–17.13 billion.

• Rights issue of INR 19.99 billion completed, oversubscribed 1.39x, reducing net debt to INR 2.8 billion.

Financial highlights

• H1 FY25 operational cash inflow was INR 29.21 billion, up 4% YoY; real estate collections rose 8.6% to INR 26.14 billion.

• H1 FY25 EBITDA was INR 1.94 billion, with an EBITDA margin of 11.9%, up 19% YoY; Q2 FY25 EBITDA was INR 1.08 billion (margin 11.3%).

• PAT for Q2 FY25 was INR 261 million, up 73.3% YoY; H1 FY25 PAT at INR 299 million, up 19%.

• Net debt reduced by INR 9.08–9.82 billion to INR 2.8 billion as of September 30, 2024; net debt-to-equity ratio at 0.08.

• Average cost of borrowing at 8.40–9.4% in Q2 FY25.

Outlook and guidance

• Targeting INR 8,500 crores in sales for FY25, contingent on timely launches in the next five months.

• Plans to launch 5.5 million sq ft in H2 FY25, aiming for 9 million sq ft total launches in FY25 and 10 million sq ft in FY26.

• Projected cashflow from ongoing and forthcoming projects estimated at INR 161.22 billion.

• EBITDA margin goal is over 20% medium-to-long term for the company, with real estate segment targeted at 22–25%.

• Management expects no adverse material impact from ongoing legal and regulatory proceedings.