Sobha Q1 FY26 Results: PAT up 123%, revenue +35% YoY

Quick takeaway

Sobha Ltd reported a sharp year-on-year rise in profit after tax (PAT) for Q1 FY26 (Apr to Jun), even as profitability fell sequentially from the previous quarter. The company also crossed ₹2,000 crore in quarterly real estate sales value for the first time, pointing to sustained demand across key markets. Revenue recognition, however, was affected by delays in occupancy certificates (OCs) for five Bengaluru projects, as outlined by the management.

Headline financial performance for the quarter

For Q1 FY26, Sobha reported PAT of ₹13.6 crore, up 123% YoY from ₹6.06 crore in the year-ago period, based on the quarterly financial table shared. Total revenue in the table stood at ₹851.93 crore, up 33.03% YoY versus ₹640.40 crore, while declining 31.33% QoQ from ₹1,987.83 crore. Separately, the company’s stated revenue figure for the quarter was ₹901 crore (₹9.01 billion), indicating different presentation across disclosures in the provided material.

Operating income in the table fell sharply to ₹0.15 crore in Jun 2025 from ₹123.70 crore in Mar 2026. Total operating expense declined QoQ to ₹851.78 crore from ₹1,864.13 crore, while rising 40.83% YoY from ₹604.84 crore.

QoQ trends: profit down, revenue lower

On a quarter-on-quarter basis, the table shows net income down 66.67% to ₹13.62 crore from ₹91.84 crore in Mar 2026. Diluted normalised EPS fell to ₹1.27 from ₹8.59 in the previous quarter. Total revenue dropped 31.33% QoQ, which the provided material describes as the lowest quarterly income growth reading in the last three years.

The same dataset also lists “Total Income Growth (%)” at -33.09 for Dec 2025, reflecting volatility in quarterly revenue trends. Management linked part of the quarter’s margin impact to delays in OC approvals affecting revenue recognition for specific projects.

Sales and demand: quarterly sales cross ₹2,000 crore

Sobha said quarterly real estate sales value reached ₹2,079 crore (₹20.79 billion), up 11% YoY and crossing ₹2,000 crore in a quarter for the first time. New area sold stood at 1.44 million sq ft, a 23% YoY increase. Average price realisation was ₹14,395 per sq ft in Q1 FY26.

The company also reported launched saleable area of 1.62 million sq ft during the quarter. In another operational snapshot in the provided material, quarterly sales value is cited at ₹1,903 crore (₹19.03 billion), up 61% YoY, highlighting that multiple cut-offs or definitions may have been referenced across updates.

Collections, cash flow, and balance sheet position

Sobha reported total collections of ₹1,778 crore (₹17.78 billion), up 15% YoY. Management commentary in the transcript also noted real estate collections of ₹1,599 crore, with contracts and manufacturing contributing ₹179 crore in Q1.

Net operating cash flow generated in the quarter was stated at ₹395 crore. The company’s average interest cost for the quarter was 8.86%, and management said it was lower than Q4 FY25, with an expectation that it could reduce further in the coming quarter.

On leverage, Sobha reported negative net debt of ₹687 crore (net debt of -₹6.87 billion), translating to a Net Debt-to-Equity ratio of -0.15.

Margin picture: EBITDA and PAT remain thin

The material cites EBITDA margin declining to 2.8% from 7.3% YoY, attributing the move to higher expenses. In the management transcript, EBITDA was stated at ₹73 crore with a margin of 8.1%, indicating different metric framing across sections of the provided data.

PAT margin was stated at 1.5% for the quarter alongside PAT of ₹13.6 crore. The quarterly table also shows depreciation and amortisation at ₹23.66 crore.

Revenue recognition impacted by OC delays

Management said delays in obtaining occupancy certificates in five Bengaluru projects prevented the company from recognising project revenues and corresponding margins in the quarter. This is an important driver behind the reported gap between strong sales and relatively modest profitability.

The company also disclosed balance revenue to be recognised from already sold units of ₹17,245 crore as of 30 June 2025. This unrecognised revenue base, along with collections and a negative net debt position, was cited as supporting cash flow visibility.

Pipeline and future cash flow visibility

Sobha’s management commentary included pipeline and cash-flow guidance points. It cited inventory visibility of about 11.55 million sq ft with a potential sales value of around ₹17,000 crore. The company also referenced a residential pipeline of 17.67 million sq ft across 17 projects in nine cities and a commercial pipeline of about 0.7 million sq ft.

For ongoing and forthcoming inventories, management stated an expected total future cash inflow of ₹24,752 crore from completed and ongoing projects, with estimated cost to complete of ₹13,661 crore, implying marginal cash flow potential of ₹1,191 crore at the project level over the next four to five years. Additionally, it cited another ₹7,000 crore of marginal cash flow over five to six years from forthcoming projects of 18.38 million sq ft expected to be launched over the next six to eight quarters.

Market reaction and what investors tracked

Ahead of the Q1 results, Sobha shares closed 1% lower at ₹1,612.65 on the BSE on Friday, according to the provided material. For investors, the key tension in the quarter was strong operational momentum (sales value and area sold) versus the sharp QoQ decline in PAT and the impact of OC-related revenue recognition delays.

Brokerage estimates cited in the material (ICICI Direct, Emkay, and P Lilladher) referenced higher PAT expectations for the quarter, but the confirmed reported PAT in the quarter summary and table was ₹13.6 crore.

Key numbers table (all ₹ in crore unless stated)

Conclusion

Sobha’s Q1 FY26 showed a clear split between strong sales and collections, and weaker QoQ profitability as revenue recognition was impacted by OC delays in five Bengaluru projects. The company ended the quarter with negative net debt and highlighted sizeable unrecognised revenue (₹17,245 crore) and multi-year cash flow visibility. Investors will likely track the timing of OC approvals, the pace of margin normalisation as revenue recognition resumes, and execution across the newly expanded footprint, including Greater Noida.