Sobha Ltd's Q2 FY27 numbers came in mixed, with revenue of Rs. 967.06 Cr (-31.30% YoY) and PAT growth of -54.56% YoY. Here's a quick read of what worked, what to watch, and what management said.
Quick Details| Results date | October 19, 2026 |
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| Quarter | Q2 FY 2026-2027 |
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| Revenue (Q2) | Rs. 967.06 Cr (-31.30% YoY) |
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| PAT (Q2) | Rs. 32.96 Cr (-54.56% YoY) |
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| EBITDA margin | 12.29% (+111 bps YoY) |
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| EPS (Q2) | Rs. 3.08 (-54.57% YoY) |
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| Market cap | Rs. 12,575.26 Cr |
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| CMP | Rs. 1,175.65 |
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Quarter Snapshot
Presales ran well ahead of guidance with H1 bookings up 47.2% YoY against a ≥30% FY target, and the Q2 company EBITDA margin of 12.29% beat the 'similar to Q1' guide, with both segments expanding margins YoY. However, completion-based recognition drove revenue down 31.3% YoY and PAT down 54.6% YoY, and H1 operating cash flow turned negative at Rs.342 Cr, putting the ~Rs.2,000 Cr cash flow guidance out of reach. The investment case hinges on H2 handovers converting the presales strength and protected 30–35% backlog margins into recognized revenue and cash.
Key Investment Insights
Key Positives
- H1 FY27 presales grew 47.2% YoY, exceeding the full-year guidance of ≥30% growth within H1 alone
- Q2 presales of Rs.2,206 Cr grew 16% YoY with average realization at Rs.15,522/sq ft vs Rs.13,648 in Q2 FY26
- Company-defined EBITDA margin improved to 12.29% from 10.15% in Q1, ahead of management's 'similar to Q1' guidance
- Real estate segment margin expanded to 14.48% from 11.22% YoY; contractual & manufacturing segment result rose 75.4% YoY with margin at 19.12% vs 11.62%
- Launches of 7.91 Mn sq ft in H1 against the 8.2 Mn sq ft FY plan; completions of 2.56 Mn sq ft on track for the 6–6.5 Mn sq ft FY guide
- Net cash positive: cash and bank balances of Rs.1,782.80 Cr exceed borrowings of Rs.1,505.19 Cr
- Customer advances (other current liabilities) grew 10.2% to Rs.13,241 Cr, supporting future revenue conversion
Risk Factors
- Revenue from operations fell 31.3% YoY to Rs.967.06 Cr and PAT fell 54.6% YoY to Rs.32.96 Cr on completion-based recognition timing
- H1 CFO was negative Rs.342.40 Cr vs positive Rs.290.63 Cr YoY and FCF was negative Rs.196.03 Cr, leaving the ~Rs.2,000 Cr net operating cash flow guidance off track
- Borrowings rose 50.1% to Rs.1,505.19 Cr and finance costs rose 24.6% YoY to Rs.40.14 Cr
- Employee benefits rose 10.7% YoY, faster than the revenue decline, compressing margins
- Reaching the 17–20% Q4 FY27 EBITDA margin exit target requires H2 margins of ~23–29% vs H1's 11.07%
- Unprovided contingent exposures total ~Rs.581 Cr: ED attachment Rs.201.61 Cr, income-tax demands Rs.84.20 Cr, and customer arbitration claim Rs.295.61 Cr