Sobha Limited — Q4 FY26 earnings call

Call held 5 May 2026

Management summary

Sobha reported an exceptional FY26 with record real estate sales of INR8,136 crores and a 9.4% increase in average price realization. The company achieved a net cash position of INR800 crores by reducing gross debt to INR1,002 crores and generated strong net operating cash flow of INR1,637 crores. A robust launch pipeline of 20.67 million square feet, with 10 million square feet targeted for FY27, underpins future growth, though some FY26 launches were delayed and margin expansion is anticipated later in FY27.

Highlights

  • FY26 real estate sales reached an all-time high of INR8,136 crores, with a consistent average quarterly run rate of approximately INR2,000 crores.

  • Average price realization increased by 9.4% to INR14,675 per square feet in FY26, up from INR13,412 in the previous year.

  • Gross debt reduced to INR1,002 crores, leading to a net cash position of INR800 crores (cash and cash equivalents of INR1,802 crores) as of March 31, 2026.

  • Net operating cash flow for FY26 grew by 39.4% to INR1,637 crores, with Q4 contributing INR366 crores.

  • A robust launch pipeline of 20.67 million square feet is in various stages of design and approval, with 10 million square feet planned for launch in FY27.

Concerns

  • Some planned launches in FY26 were delayed due to multiple factors, both external and internal.

  • Gross margins and EBITDA in Q4 FY26 were lower than historical guidance, with significant improvement expected only towards Q3 and Q4 of FY27.

  • Sales for the Rivana project, launched late in Q4 FY26, achieved only 25% of launched units in the initial weeks, below some analyst expectations.

Key financials

  1. Total Income ₹2,030 Cr
  2. Total Income FY26 ₹5,384 Cr
  3. EBITDA ₹194 Cr
  4. EBITDA FY26 ₹503 Cr
  5. PAT ₹92 Cr
  6. PAT FY26 ₹193 Cr
  7. Real Estate Sales FY26 ₹8,136 Cr +30%YoY
  8. Average Price Realization FY26 ₹14,675/sqft +9.4%YoY
  9. Real Estate Collections FY26 ₹7,067 Cr
  10. Total Collections FY26 ₹7,798 Cr +26.1%YoY
  11. Net Operating Cash Flow FY26 ₹1,637 Cr +39.4%YoY
  12. Net Operating Cash Flow Q4 ₹366 Cr

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

₹18,600 Cr

as of 2026-03-31 quantified

Inflow this quarter

₹2,000 Cr

Execution

projects that are nearing completion and expected to be recognized in the next 12 months

Pipeline

other

pipeline of 20.67 million square feet in various stages of design and approval, with 10 million square feet expected to launch in FY27

Cancellations & deferrals

  • deferred: Some planned launches in FY26 were delayed due to multiple factors, both external and internal.
The company has a strong foundation with record sales performance and a robust launch pipeline, providing clear visibility for margin expansion.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹1,150 Cr through operating cash flow
    • Land acquisition for business development ₹1,150 Cr
    the business development, like you would have seen that last year, we have spent close to about INR1,150 crores, INR1,160 crores on land. ... So from a cash flow point of view, can we look at the similar INR1,100 crores, INR1,200 crores kind of a spend in fiscal '27? Jagadish Nangineni: Yes. That is exactly what I was alluding to.
  • Debt Gross ₹1,002 Cr · Net cash ₹800 Cr
    Gross debt reduced to INR1,002 crores and cash equivalents were INR1,800 crores, resulting in negative net debt of INR800 crores.
  • M&A Mumbai BD Pipeline Joint venture · Announced · Consideration ₹[object Object] (undisclosed)

    To gain understanding of operating and scaling in Mumbai market

    So in MMR, we are pursuing a couple of projects, which we should we should be able to conclude during this year, which one is a redevelopment project and one is we are trying to buy a land. Both are small projects, but at the same time, it will give us a good understanding of how we can operate and scale in Mumbai. ... Both the new projects both put together should be about INR2,000 crores, Biplab.
  • Liquidity Cash ₹1,802 Cr Cash balance provides resilience through cycles and enables funding of launches, construction, and land investments.
    Gross debt reduced to INR1,002 crores and cash equivalents were INR1,800 crores, resulting in negative net debt of INR800 crores. The cash balance provides resilience through cycles and enable us to fund launches, construction movement and land investments.

Guidance & targets

Sales

  • Real Estate Sales Growth Sales · FY '27 · High confidence about 30%
    Last year, we have done about 30% growth in terms of sales and similar rate is what we expect this FY '27 as well.

    — Jagadish Nangineni

Launches

  • Area to be launched Launches · FY '27 · High confidence close to about 10 million square feet
    Looking ahead, we plan to launch in this financial year, at least about, again, more than 50%, close to about 10 million square feet is what we look to launch across Bangalore, Gurgaon, Hyderabad, Thrissur, and Pune.

    — Jagadish Nangineni

  • GDV of FY27 launches (10msf) Launches · FY '27 · High confidence about INR15,000 crores
    So if you take an average pricing of about what we have done this time, which is about INR4,700 and similar maybe around INR15,000, that would be about INR15,000 crores.

    — Jagadish Nangineni

Profitability

  • EBITDA Margin (unrecognized revenue) Profitability · High confidence at least about 30% plus
    we expect an EBITDA margin of at least about 30% plus there.

    — Jagadish Nangineni

  • EBITDA Margin (nearing completion projects) Profitability · next 12 months · High confidence 24% to 26%
    The projects that are nearing completion and expected to be recognized in the next 12 months are likely to deliver higher margins in the range of 24% to 26%, significant improvement from this year.

    — Jagadish Nangineni

Cash Flow

  • Net Operating Cash Flow Cash Flow · FY '27 · High confidence close to INR2,000 crores
    We are aiming in FY '27 net cash net operating cash flow close to INR2,000 crores.

    — Yogesh Bansal

Business Development

  • Land Acquisition Spend Business Development · fiscal '27 · High confidence similar INR1,100 crores, INR1,200 crores
    So from a cash flow point of view, can we look at the similar INR1,100 crores, INR1,200 crores kind of a spend in fiscal '27? Jagadish Nangineni: Yes. That is exactly what I was alluding to.

    — Jagadish Nangineni

Sales Mix

  • Sustenance Sales Contribution Sales Mix · FY '27 · High confidence 45% to 50%
    this year, FY '27, we expect roughly about 45% to 50% from sustenance and 50% to 55% from new launches.

    — Jagadish Nangineni

  • New Launches Sales Contribution Sales Mix · FY '27 · High confidence 50% to 55%

    — Jagadish Nangineni

Inventory

  • Total GDV of unrecognized revenue + unreleased inventory Inventory · High confidence INR27,000, INR28,000 crores
    And we have either released or unreleased inventory of about INR1,200 crores, INR1,300-odd crores in our existing projects. So is that the fair way to look, we'll have maybe close to about INR27,000, INR28,000 crores.

    — Parvez Qazi

What to watch in Q1 FY27

FY27 Real Estate Sales Growth

Next quarter (Q1 FY27 results)
Current FY26 growth was 30%
Target ~30% growth for FY27

Why it matters

Key indicator of continued business momentum and market demand, verifying management's guidance.

Last year, we have done about 30% growth in terms of sales and similar rate is what we expect this FY '27 as well.

Risks & concerns

  • Geopolitical issues

    medium

    Geopolitical issues created uncertainty around Q4 FY26, potentially impacting sales momentum for new launches, and contribute to inflation.

    Both acknowledged

  • AI impact on IT/ITeS client demand

    medium

    Concern about potential slowdown in demand from the IT/ITeS sector due to AI, though management's current indicators show no significant slowdown.

    Analyst acknowledged

  • Commodity price inflation

    medium

    Significant price increases for commodities and materials, with the full impact on project margins being dynamic and yet to be estimated.

    Analyst acknowledged

  • Labor shortage due to elections

    low

    Industry-wide labor shortage due to elections, expected to be a brief interruption and normalize once elections stabilize.

    Analyst acknowledged

  • FSI law change in Bangalore

    low

    Potential new additional FSI law in Bangalore is still an ongoing matter in various forums, awaiting clarity on its impact on development plans.

    Analyst acknowledged

Q&A highlights

7 direct
FY26 sales performance vs expectations and Gurgaon launch delay Partial
Congratulations on a decent quarter. So the sales were low expectation. I mean, our expectation was more like INR10,000 crores. I understand one of the launch got postponed in Gurgaon.

Highlights analyst concern about sales miss relative to expectations and identifies a specific reason (Gurgaon launch delay) which management later confirms was launched in April.

Asked by Parikshit Kandpal

Rivana project sales momentum and geopolitical issue impact Direct
Yes. Like you would have seen, Parikshit, that Rivana is a large project. It's about 2.5 million square feet, 1,384 units. We launched our Phase 1 there, which is 684 units. We, in the first few weeks of the launch, we did about 25% of the sales, whatever we launched.

Provides specific sales figures for a key new launch (Rivana) and addresses the initial momentum, acknowledging the sales percentage achieved in the first few weeks.

Asked by Parikshit Kandpal

Timeline for gross margin and EBITDA expansion Direct
The gross margin, like I was mentioning, is, will start coming through with the project completions that we have on the ongoing projects, which are scheduled to start getting completed in end of Q2 and Q3. And that's where, we think that the gross margins will significantly see, start looking, there will be an uptick on that.

Clarifies that significant margin improvement, a key investor concern, is back-end loaded in FY27, tied to the completion of ongoing projects in Q2 and Q3.

Asked by Puneet Gulati

Hoskote project details (size, GDV, RERA timelines) Direct
So this project will be about 5.3 million square feet, only residential portion. So that's, we should be able to receive our RERA in Q1 itself and launch the project. So we are in very advanced stages of the launch. So -- and the overall GDV for the project should be about INR7,000 crores.

Provides crucial details for a significant upcoming launch, including its scale (5.3msf), estimated GDV (INR7,000 crores), and expected RERA approval and launch in Q1 FY27.

Asked by Girish Choudhary

Business development pipeline for Hyderabad/Mumbai and cash flow for land Direct
So Hyderabad, while we plan to do that, we are just, we are hoping to launch our second project this financial year. We are on the approval stage. And we are continuously looking at new opportunities in Hyderabad as well.

Indicates active expansion plans in new key markets like Hyderabad and Mumbai, confirming continued investment in land acquisition for future growth.

Asked by Girish Choudhary

Comparison of sales performance between Rivana and Crescent projects Direct
Right. Like I mentioned, Biplab, it is a function of also the time that we have given from, for us to prepare in terms of launch. So it's, I don't see it as too, I mean, linked in terms of responses. Both are doing pretty well.

Addresses a direct comparison of new project performance, explaining that the difference is a function of launch timing and preparation rather than inherent project strength, stating both are performing well.

Asked by Biplab Debbarma

Impact of AI on IT/ITeS client demand in Bangalore and overall market demand Direct
While that's a concern that's existing across the industry, on the ground, what we are seeing from a, which are our leading indicators, which is visible for us, there doesn't seem to be a big slowdown or anything of that sort. There seems to be a continued interest in the projects.

Directly addresses a macro concern (AI impact on a key customer segment in Bangalore) and provides management's on-the-ground assessment of stable demand despite industry-wide concerns.

Asked by Parikshit Kandpal

Impact of geopolitical events on demand, labor shortage, and commodity inflation Direct
There is, of course, surely, there is a significant price increases for a short while in some of the commodities and in some of the other materials. So the impact of that immediately over the course of the whole projects is yet to be estimated. It's a little dynamic situation.

Acknowledges multiple external risks (inflation, labor shortage due to elections) and their potential impact, indicating a wait-and-watch approach for assessing the full effect on margins.

Asked by Akash Gupta

2 min read 6 chapters

Detailed narrative

Record Sales Performance and Price Realization in FY26

Sobha achieved an all-time high in real estate sales for FY26, reaching INR8,136 crores, driven by a consistent quarterly run rate of approximately INR2,000 crores. This strong performance was accompanied by a 9.4% increase in average price realization, which rose to INR14,675 per square feet from INR13,412 in the previous year, reflecting healthy demand and premiumization. Bangalore recorded INR4,500 crores and NCR INR2,450 crores in annual sales, together contributing 85% of total sales.

Strong Financials and Debt Reduction

The company reported a total income of INR5,384 crores and a PAT of INR193 crores for FY26, with Q4 total income at INR2,030 crores and PAT at INR92 crores. Notably, Sobha significantly strengthened its balance sheet by reducing gross debt to INR1,002 crores, resulting in a net cash position of INR800 crores as of March 31, 2026, with cash and cash equivalents at INR1,802 crores. Net operating cash flow for FY26 grew by 39.4% to INR1,637 crores, demonstrating robust cash generation.

Robust Launch Pipeline and FY27 Growth Outlook

Sobha boasts a substantial pipeline of 20.67 million square feet across various stages of design and approval, with plans to launch approximately 10 million square feet in FY27. This includes key projects like Hoskote (5.3 million square feet, INR7,000 crores GDV) and continued expansion in Bangalore, Gurgaon, Hyderabad, Thrissur, and Pune. Management expects FY27 real estate sales to grow by a similar rate of around 30% as in FY26, with 50-55% coming from new launches.

Margin Expansion Expected in FY27

While Q4 FY26 saw some margin pressure, management anticipates significant improvement in P&L margins for FY27, particularly towards Q3 and Q4. This uplift is expected as projects nearing completion, with an estimated EBITDA margin of 24-26% over the next 12 months, are recognized. The company also projects an EBITDA margin of over 30% for its unrecognized revenue of INR18,600 crores, indicating strong future profitability.

Strategic Project Launches and Market Performance

In FY26, Sobha launched 6.04 million square feet, though some planned launches were delayed. The recently launched SOBHA Crescent Phase 1 in Gurgaon received a good response, achieving approximately INR1,100 crores in sales. The Rivana project, launched late in Q4 FY26, recorded about INR500 crores in sales, representing 25% of the launched units, with sustained interest expected. The company maintains a strong focus on execution and delivery, having delivered 3,188 homes (5.4 million square feet) in FY26.

Business Development and Geographic Expansion

Sobha plans to continue its aggressive business development, with an anticipated land acquisition spend of INR1,100-1,200 crores in FY27, similar to FY26. The company is actively pursuing new opportunities in Hyderabad, with a second project in the approval stage, and exploring redevelopment and land acquisition projects in Mumbai with a potential GDV of INR2,000 crores. This strategic expansion aims to diversify its portfolio and sustain growth momentum.

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