Sobha Limited — Q1 FY27 earnings call

Call held 21 Jul 2026

Management summary

Sobha Limited reported a landmark Q1 FY27 with its highest ever quarterly real estate sales of INR3,656 crores, marking a 76% YoY increase. Total income grew by 48% to INR1,330 crores, and PAT surged to INR50.7 crores. The company maintained a strong net cash position of INR659 crores and launched significant new projects, reinforcing its growth pipeline. While facing minor collection delays due to labor shortages and approval uncertainties for some new projects, management remains optimistic about future growth and margin expansion.

Highlights

  • Real estate sales value of INR3,656 crores, a 76% increase year-on-year.

  • Total income grew by 48% year-on-year to INR1,330 crores.

  • PAT increased to INR50.7 crores from INR13.5 crores in Q1 FY26.

  • Net cash position of INR659 crores, with cash and cash equivalents at INR1,769 crores.

  • Launch of 3 new projects across Bangalore and Gurgaon with a combined saleable area of 6.89 million square feet and potential sale value of INR10,000 crores.

Concerns

  • Milestone billing collections were relatively lower due to labor shortage in April and May, leading to a small shortfall in cash flow.

  • Mumbai project launch faces uncertainty regarding approvals and timeline, requiring 'a lot of work to be done there'.

  • Potential impact on overall cost from the 60% hike in minimum wages in Karnataka, though management expects to absorb it.

Key financials

  1. Total Income ₹1,330 Cr +48%YoY
  2. Real Estate Revenue ₹1,107 Cr +60%YoY
  3. Contractual & Mfg Revenue ₹171 Cr +5.5%YoY
  4. PAT ₹50.7 Cr +275.5%YoY
  5. Net Debt Ratio -0.14
  6. Average Borrowing Cost 7.6%

What they filed

Q1 FY27: revenue up 50.0%, net profit up 264.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue934 1,224 1,241 852 1,408 +51%943 −23%1,988 +60%1,278 +50%
EBITDA77 67 94 24 96 +25%39 −42%152 +62%78 +225%
Net profit26 22 41 14 73 +181%15 −32%92 +124%51 +264%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹3,656 Cr

as of 2026-06-30 quantified

76% YoY

Inflow this quarter

₹3,656 Cr

Composition

Mix 2 geographies
  • Bangalore 57%
  • NCR 37.8%

Share of order book by geography· partial disclosure (94.8% of the book)

Pipeline

other

Forthcoming launch pipeline across 17 projects, with 9 projects (8.2 MSF) planned for launch in remaining FY27.

Q1 FY27 was a landmark quarter for sales, driven by successful launches in Bangalore and NCR. The company has strong visibility for future sales from its launch pipeline and unsold inventory.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹70 Cr
    During the quarter, we invested approximately INR370 crores in land and approximately INR70 crores in capex.
  • Debt Gross ₹1,110 Cr · Net cash ₹659 Cr Cost 7.6%
    As on 30th June 2026, gross debt stood at INR1,110 crores, while cash and cash equivalents stood at INR1,769 crores. Our net debt ratio stood at negative 0.14 and our average borrowing cost is 7.62%.
  • M&A Mumbai land parcel Acquisition · Closed · Consideration ₹[object Object] (cash)

    Investment in new growth opportunity

    One small land we have bought in Mumbai, and we have invested in a new opportunity in Greater Noida. ... The Mumbai project is about 1.3 acres and we bought the land for about INR180 crores.
  • M&A Greater Noida land parcel Joint venture · Closed

    Investment in new growth opportunity, expanding in high-growth micro markets

    Combined GDV for Mumbai and Greater Noida projects is about INR2,700 crores to INR3,000 crores.

    One small land we have bought in Mumbai, and we have invested in a new opportunity in Greater Noida. ... the Greater Noida project is a joint development for which we have paid certain dues for the authority and for the landowners. So, both so each one both put together, the GDV for this would be about INR2,700 crores to INR3,000 crores.
  • Liquidity Cash ₹1,769 Cr Ended the quarter with a net cash position of about INR659 crores. Operational cash inflow remained quite healthy at INR1,924 crores despite higher investments in land acquisition and project expansion. Total net operation cash flow generated INR312 crores.
    We ended the quarter with a net cash position of about INR659 crores... Our operational cash inflow remained quite healthy at INR1,924 crores despite higher investments in land acquisition and project expansion. This financial strength gives us flexibility to continue investing in future growth while maintaining a prudent capital allocation strategy. Total net operation cash flow we generated INR312 crores.

Guidance & targets

Volume

  • Project Completions Volume · FY27 · High confidence 6 to 6.5 million square feet

    From 5.4 million square feet today

    We plan to complete about 6 to 6.5 million square feet for FY '27 as against last year's completion of about 5.4 million square feet, which can be about 20% higher.

    — Jagadish Nangineni

Sales

  • Presales Growth Sales · FY27 · High confidence at least 30%
    I think we continue to aim for that in terms of presales. Now coming to the exact timing of these remaining project launches of about 8.2 million square feet, like in the opening comments I have given, those most all these about 9 projects, we would be able to do it within the next 9 months.

    — Jagadish Nangineni

  • Launch Pipeline (Area) Sales · remaining FY27 · High confidence 8.2 million square feet
    Of this, we are confident of launching 9 projects, aggregating approximately 8.2 million square feet during the remaining period of FY ’27.

    — Jagadish Nangineni

  • Launch Pipeline (GDV) Sales · remaining FY27 · High confidence INR12,000 crores
    At the current average of INR15,000 crores, it should be about another INR12,000 crores.

    — Jagadish Nangineni

Debt

  • Net Debt Level Debt · this year (FY27) · High confidence about 0 level
    We envisage our net debt to be at about 0 level for this year.

    — Jagadish Nangineni

Capex

  • Land Acquisition Spend Capex · this year (FY27) · Medium confidence INR1,500 crores to INR1,600 crores

    Previously INR1,160 crores → INR1,500 crores to INR1,600 crores

    I mean, last year, we did about INR1,160 crores. And this year, we already did about INR370 crores. And we have identified a couple of opportunities where I think we can invest in Bangalore and in NCR. So, if we are able to complete those transactions, then we might look at closer towards INR1,500 crores to INR1,600 crores this year.

    — Jagadish Nangineni

Margin

  • EBITDA Margin Margin · by Q4 FY27 · Medium confidence 17% to 20%

    From 9.7% today

    So, our expectation is that by Q4, as we currently, we are at about 9.7% EBITDA. So, as we leave the end of Q4, maybe hopefully, we should be able to do closer towards 17% to 20%.

    — Jagadish Nangineni

Launches

  • Greater Noida Project Launch Launches · FY27 · High confidence this financial year
    The Greater Noida one, we are envisaging to launch this financial year.

    — Jagadish Nangineni

  • SOBHA Crescent Phase 2 Launch Launches · FY27 · High confidence Q3 or beginning of Q4
    Pritesh. Crescent Phase 2 will happen during this financial year, most likely in Q3, towards the end of Q3 or beginning of Q4.

    — Jagadish Nangineni

What to watch in Q2 FY27

Mumbai Project Launch Progress

next quarter / FY27
Current Uncertain due to approvals, endeavoring for FY27 launch
Target Clearer timeline or launch announcement

Why it matters

Successful launch of this project will add significantly to the sales pipeline and GDV.

Mumbai one, we would endeavor to do it. But considering the approvals, uncertainty, a clear timeline from -- there is a lot of work to be done there. And hence, although our endeavor is to launch it this financial year

Risks & concerns

  • Labor Shortage Impact on Collections

    medium

    Milestone billing collections were lower in Q1 FY27 due to labor shortages in April and May, leading to a small cash flow shortfall.

    Management acknowledged

  • Approval Delays for Mumbai Project Launch

    medium

    The Mumbai project launch timeline is uncertain due to pending approvals and significant work required, potentially delaying its launch beyond FY27.

    Management acknowledged

  • Impact of Minimum Wage Hike in Karnataka

    low

    A 60% hike in minimum wages in Karnataka is under evaluation for its impact on overall cost, though management expects to absorb it within existing budgets.

    Analyst acknowledged

Q&A highlights

8 direct
FY27 Presales Growth Target and Launch Pipeline GDV Direct
I think we continue to aim for that in terms of presales. Now coming to the exact timing of these remaining project launches of about 8.2 million square feet, like in the opening comments I have given, those most all these about 9 projects, we would be able to do it within the next 9 months.

Clarifies the company's annual presales growth target and provides details on the timing and scale of upcoming project launches, which are key drivers for future revenue.

Asked by Girish Choudhary

Collections vs Presales and Cash Flow Shortfall Direct
One is the collections from new sales have come towards the end of the quarter. And hence, I mean, there is more collection that would be coming from these new sales, but part of the collections only have come in this Q1. Second is typically, our milestone billing collections this time were relatively lower because some of the milestones we could not achieve due to labor shortage in -- mainly in April and May.

Addresses a potential concern about lower-than-expected collections relative to strong presales, attributing it to timing of new sales and temporary labor shortages, which impacts short-term cash flow.

Asked by Girish Choudhary

Forthcoming Project Margin Discrepancy Direct
So, the main difference for the new forthcoming majority - I mean, the mix of the projects, a greater mix is towards joint development. And hence, that's the marginal cash flow, you would have seen reduction. Second is earlier in this marginal cash flow for forthcoming projects, we had Hoskote and Hoskote as one of the main projects, which had, which was our own land and hence, the marginal cash flow was much higher.

Explains the lower projected margin for forthcoming projects compared to previous disclosures, clarifying that a higher proportion of joint development projects (with lower marginal cash flow) is the primary reason.

Asked by Puneet Gulati

New Land Acquisitions and FY27 Land Spend Outlook Direct
I mean, last year, we did about INR1,160 crores. And this year, we already did about INR370 crores. And we have identified a couple of opportunities where I think we can invest in Bangalore and in NCR. So, if we are able to complete those transactions, then we might look at closer towards INR1,500 crores to INR1,600 crores this year.

Provides clarity on current land acquisition activities (Mumbai, Greater Noida) and revises the full-year land acquisition spend guidance upwards, indicating continued investment in future growth.

Asked by Puneet Gulati

Demand Scenario and Real Estate Cycle Direct
So, for any new launches, like you know, it's not only dependent on the timing of the launch, but also the extent of preparation for that. So, in that aspect, we were much better prepared and hence, there is a stronger response is what we can see in Q1. Otherwise, the overall demand scenario seems to be quite stable from what we have seen in terms of the launches and also what we are witnessing post the launches also. It's been quite steady. So, we believe that it is a reasonably good demand scenario.

Offers management's perspective on the current real estate demand, suggesting stability and attributing strong Q1 performance to thorough preparation for launches, which is crucial for investor confidence.

Asked by Parikshit Kandpal

Details on Mumbai and Greater Noida Business Development Direct
The Mumbai project is about 1.3 acres and we bought the land for about INR180 crores. And the Greater Noida project is a joint development for which we have paid certain dues for the authority and for the landowners. So, both so each one both put together, the GDV for this would be about INR2,700 crores to INR3,000 crores.

Provides specific financial and operational details for the newly acquired land parcels, including acquisition cost, nature of development (outright vs. JV), and potential GDV, giving insight into future project pipeline.

Asked by Biplab Debbarma

Outlook on Margin Revival for H2 FY27 Direct
I mean I still expect the margins to be significantly better in the second half means sequentially, it should start looking better. Q2 might be similar or depending on the number of completions that we can do, Q2 might be similar. But Q3 and Q4 sequentially should become better as we complete some of our high-margin projects and start handing over. So, our expectation is that by Q4, as we currently, we are at about 9.7% EBITDA. So, as we leave the end of Q4, maybe hopefully, we should be able to do closer towards 17% to 20%.

Offers a clear timeline and quantitative target for EBITDA margin improvement, linking it to project completions and handover of high-margin projects, which is a key profitability driver.

Asked by Biplab Debbarma

Status of Gurgaon Commercial Project Direct
That particular project, it's still the endeavor to launch and develop it. We have, in fact, the entire TDR for it, and we can develop the entire project. But currently, we are looking at an option -- evaluating an option of launching it, but not actually selling it, but retaining for our rental income. So that we are in an evaluation phase. And once that is -- and hence, we have removed it. So, if we decide to do part of the development as a sale model, we'll bring it back.

Reveals a strategic shift in approach for a previously planned commercial project, indicating a potential move towards an annuity income model rather than outright sale, impacting future revenue mix and asset base.

Asked by Pritesh Sheth

3 min read 6 chapters

Detailed narrative

Q1 FY27 Sales Performance Highlights

Sobha Limited recorded its highest ever quarterly real estate sales in Q1 FY27, achieving a sales value of INR3,656 crores, marking a substantial 76% year-on-year increase. The company sold 2.34 million square feet across 1,432 homes at an average realization of INR15,655 per square feet. Bangalore remained the strongest market, contributing 57% (INR2,067 crores) of quarterly sales, while the NCR region also saw its highest quarterly sales at INR1,384 crores. Key project launches like SOBHA One World and SOBHA Crescent significantly contributed to this record performance.

Financial Performance and Profitability

The company reported a total income of INR1,330 crores for Q1 FY27, representing a 48% year-on-year growth. Real estate revenue increased by 60% to INR1,107 crores, and profit after tax (PAT) surged to INR50.7 crores from INR13.5 crores in Q1 FY26. Management expects margins to improve significantly in the second half of FY27, targeting 17-20% EBITDA by Q4 FY27, up from an implied 9.7% in Q4 FY26, driven by the completion and handover of high-margin projects.

Project Launches and Development Pipeline

Sobha launched three new projects in Q1 FY27 across Bangalore and Gurgaon, totaling 6.89 million square feet with a potential sale value of INR10,000 crores. The company has a robust forthcoming launch pipeline of 20.77 million square feet across 17 projects. Of this, 9 projects, aggregating 8.2 million square feet with an estimated GDV of INR12,000 crores, are planned for launch in the remaining period of FY27. This pipeline, combined with 14.94 million square feet of unsold inventory, provides strong visibility for future sales.

Capital Allocation and Balance Sheet Strength

Sobha maintains a strong balance sheet with a net cash position of INR659 crores and cash and cash equivalents of INR1,769 crores as of June 30, 2026. Gross debt stood at INR1,110 crores, with an average borrowing cost of 7.62%. The company invested INR370 crores in land and INR70 crores in capex during the quarter. Management aims to achieve a net debt level of 'about 0' for FY27 and plans for land acquisition spend of INR1,500-1,600 crores for the year.

Strategic Land Acquisitions and Future Projects

During Q1 FY27, Sobha acquired a 1.3-acre land parcel in Mumbai for INR180 crores and entered a joint development opportunity in Greater Noida. These new acquisitions, along with existing commitments, contribute to a combined potential GDV of INR2,700-3,000 crores. The Greater Noida project is envisaged for launch in FY27, while the Mumbai project's launch is dependent on approvals. The company is also evaluating a previously planned Gurgaon commercial project for potential retention as a rental income asset rather than outright sale.

Operational Cash Flow and Challenges

Operational cash inflow for the quarter was INR1,924 crores, with net operating cash flow generated at INR312 crores. Despite this, the company experienced a net cash outflow of INR149 crores, primarily due to investments in land and future development. Milestone billing collections were slightly lower due to labor shortages in April and May, causing a small shortfall. Additionally, the company is evaluating the impact of a 60% minimum wage hike in Karnataka on its overall costs, though it expects to absorb it within budget.

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