Sobha Ltd Q1 profit jumps over 2-fold to ₹13.61 crore, revenue rises to ₹901 crore

Bengaluru-based real estate developer Sobha Ltd has posted a stellar performance for the first quarter of FY25, registering a significant growth in its consolidated net profit and revenue. The company reported a net profit of ₹13.61 crore for the April–June quarter, more than double the ₹6.14 crore it earned in the same quarter last year. This robust performance is attributed to strong execution across residential projects, healthy demand, and cost optimization initiatives.

In a regulatory filing on Friday, Sobha Ltd also announced that its total income rose to ₹901 crore, compared to ₹776 crore in the year-ago period, marking a year-on-year (YoY) revenue growth of over 16%. The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) margin remained resilient, backed by sustained pricing power and improved operational efficiency.

Sobha Ltd Q1 FY25 Financial Highlights:

Key Performance Drivers in Q1 FY25

1. Strong Residential Sales Momentum

Sobha Ltd reported strong booking values and volumes across its key residential markets including Bengaluru, Gurugram, and Thrissur. The total saleable area booked stood at 1.25 million sq ft, with a total booking value of over ₹1,400 crore. The company’s flagship projects such as Sobha City (Gurugram), Sobha Dream Acres, and Sobha Windsor contributed significantly to these numbers.

2. Improved Collections and Cash Flow

The company witnessed healthy collections of ₹930 crore during the quarter, which helped bolster its operating cash flows. This also enabled the company to reduce its net debt marginally to ₹1,845 crore, despite new launches and ongoing capex.

3. Operational Efficiency and Cost Control

Sobha has consistently focused on in-house capabilities, from design to construction. This end-to-end model allowed the company to manage construction costs better and deliver projects on time. Construction cost per square foot remained under control due to bulk procurement and automation at project sites.

Segment-wise Revenue Analysis

The residential segment remained the largest revenue contributor, followed by contractual construction projects that include partnerships with corporates and institutional developers.

Launch Pipeline and Expansion Plans

Sobha Ltd plans to launch over 6 million sq ft of new projects in the remainder of FY25 across its key geographies, with a focus on Bengaluru, Chennai, Pune, and Hyderabad. The company is also evaluating land acquisition opportunities in Tier 2 cities, riding on the surge in demand post-pandemic.

The management indicated that the focus for FY25 will be on premium residential launches, mid-income housing, and plotted developments under the “Sobha Townships” brand.

Market Sentiment and Analyst Take

The company’s Q1 performance has been positively received by analysts and investors, with brokerage firms noting:

• Healthy margin profile despite input cost pressures
• Sustained demand for mid and premium housing
• Improved debt metrics and balance sheet stability
• Strategic launches in demand-rich micro-markets

Investors responded favorably to the results, with Sobha Ltd shares rising nearly 4% intraday post the Q1 earnings announcement. The stock has delivered over 40% returns in the last 12 months, outperforming the Nifty Realty index.

Sobha Ltd – Quarterly Performance Trend (Last 5 Quarters)

Outlook for FY25

Sobha Ltd remains optimistic about its growth trajectory in the current fiscal year. The management aims to:

• Launch new projects worth over ₹5,000 crore
• Increase execution pace in under-construction projects
• Bring down net debt to ₹1,700 crore
• Maintain EBITDA margins in the 15–16% range

With increasing urbanization, formalization of real estate transactions via RERA, and pent-up demand from both homebuyers and NRIs, Sobha is poised to leverage its brand strength and execution capability.

Challenges and Risks

Despite its solid performance, the company remains cautious about:

• Input cost volatility, especially steel and cement
• Regulatory delays in approvals and land acquisitions
• Interest rate movements, which can impact homebuyer affordability
• Macroeconomic uncertainties, including geopolitical issues and currency volatility

However, the company’s diversified presence across southern and western India, along with its in-house capabilities, are expected to mitigate these challenges effectively.

Conclusion

Sobha Ltd’s Q1 FY25 results reflect its strong operational foundation, effective cost management, and strong consumer demand in India’s key housing markets. With its robust project pipeline, rising brand equity, and focus on execution, the company is well-positioned to capitalize on India’s housing growth in FY25 and beyond.

Disclaimer: This content is intended for informational purposes only and does not constitute financial advice, investment recommendation, or an offer to buy or sell securities. Readers are advised to consult certified financial advisors and conduct their own research before making investment decisions.