SobhaQ1 FY27
Sobha Q1 FY27 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹1,280P/E: 60.0Market Cap: ₹13.8K CrSector: Realty
Management growth scorecard
Revenue
Category 2
Margin
Category 1
Fundraise
N/A
Order
Yes
Capex
Yes
3 of 4 growth signals are positive.
Full analysisRevenue guidance
Category 2- →SOBHA Limited targets at least 30% growth in presales for FY ’27, with potential to exceed this if all launches happen on time.
- →Plans to complete about 6 to 6.5 million sq. ft. in FY ’27, up around 20% from last year's 5.4 million sq. ft.
- →Forthcoming launch pipeline of 20.77 million sq. ft. across 17 projects, with 9 projects (~8.2 million sq. ft.) planned for launch in the remaining FY ’27.
- →Launches spread across key regions: 4 projects (~3 million sq. ft.) in Bangalore, 2 projects (~2 million sq. ft.) in NCR, 1 project (~1.7 million sq. ft.) in Hyderabad, and 2 projects (~1.5 million sq. ft.) in Kerala.
- →Unsold inventory of 14.94 million sq. ft. plus forthcoming launches provide strong visibility for sustainable growth in sales and revenues over medium term.
- →Expect margin improvement in H2 FY ’27, targeting 17-20% EBITDA by Q4 with completion of high-margin projects.
Margin guidance
Category 1- →SOBHA Limited targets at least 30% growth in presales for FY ’27, with potential to exceed this if all launches occur on time.
- →Operational cash inflow increased by 8.2% YoY in Q1 FY ’27, indicating healthy cash generation.
- →EBITDA margin expected to improve significantly in H2 FY ’27, targeting 17-20% by Q4 from around 9.7% currently.
- →Margin expansion anticipated as high-margin projects complete and handovers increase.
- →The company maintains strong earnings visibility with INR20,553 crores of revenue yet to be recognized from sales already made.
- →Profit After Tax rose to INR50.7 crores in Q1 FY ’27 from INR13.5 crores in Q1 FY ’26, reflecting improved profitability.
- →Continued focus on financial discipline, improving collections and operating cash flows supports sustainable profit growth.
- →Steady development pipeline and strong demand bolster long-term earnings outlook.
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Fundraise plans
- →SOBHA Limited has approved Non-Convertible Debentures (NCDs) worth INR 1,000 crores.
- →The plan is to issue these NCDs over the next couple of quarters in tranches as acquisition opportunities are identified and firmed up.
- →The issuance will not be done all at once but split into at least two tranches as required.
- →No mention of any new equity fundraising during the call.
- →The company aims to maintain a strong, liquid balance sheet with net debt close to zero for the financial year.
- →Current borrowing costs are low at around 7.62%, supporting flexibility in funding growth without compromising financial discipline.
Order book
Yes- →SOBHA Limited reported strong order book visibility in Q1 FY ’27.
- →The company's other businesses generated revenue of about INR170 crores with good order book visibility.
- →Commercial rental income was about INR23 crores, expected to be steady in FY ’27 as in the previous year.
- →Total operational cash inflow during Q1 FY ’27 was INR1,924 crores.
- →Real estate collections stood at INR1,756 crores; collections from contractual and manufacturing businesses at INR168 crores.
- →The company has a forthcoming launch pipeline of about 20.77 million square feet across 17 projects.
- →Of these, 9 projects aggregating approximately 8.2 million square feet are planned to be launched within the remaining 9 months of FY ’27.
- →Unsold inventory stood at 14.94 million square feet as of Q1 FY ’27.
- →Total revenue yet to be recognized from sales already made is INR20,553 crores.
- →Strong balance sheet with a net cash position of INR659 crores provides flexibility to fund growth.
Capex plans
Yes- →The company invested approximately INR 370 crores in land and about INR 70 crores in capex during Q1 FY ’27.
- →Planned land payments for FY ’27 and FY ’28 are expected to be roughly similar to previous years, aligned with commitments for ongoing and future projects.
- →New land acquisitions include a small parcel in Mumbai and a joint development opportunity in Greater Noida.
- →Approved NCDs of INR 1,000 crores are planned to be issued in tranches over the next couple of quarters to fund acquisitions and growth opportunities.
- →Capital allocation remains disciplined with focus on land acquisition, project expansion, and maintaining a strong balance sheet.
- →The company expects to sustain investments while retaining liquidity and pursuing opportunities, targeting gross land capex of around INR1,500-1,600 crores this year.
How does Sobha rank vs peers in Realty?
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