SOBHA Q2 FY25 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹934 Cr
verified against source
Revenue YoY
25%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Sobha Limited reported Q2 FY25 revenue of INR 965 crore, up 25% YoY, driven by strong real estate collections of INR 2,614 crore in H1. The company raised INR 1,999 crore via rights issue (oversubscribed 1.39x), reducing net debt by INR 908 crore to INR 280 crore. H1 pre-sales stood at INR 3,052 crore with Q2 at INR 1,179 crore. Kerala recorded its best-ever quarterly performance at INR 338 crore. The contractual and manufacturing segment continues to face margin pressure (~6% EBITDA in H1) due to resource mobilization and cost escalation issues, expected to persist for 2 more quarters. The company maintained its INR 8,500 crore full-year sales guidance but caveated that visibility depends on H2 launch approvals, particularly in Bengaluru. Management targets over 20% EBITDA margin in the medium-to-long term and 10 million sq ft launches in FY26. Key risks include launch timing delays, high ticket-size inventory concentration (67% over INR 4 crore), and luxury market demand reaching a steady-state rather than continued growth. Entry into Mumbai and Greater Noida is under evaluation.
Colored figures show movement against the previous available record.
Guidance to track
- Management maintained guidance but caveated that achievement depends on timing of H2 launches in the next five months. Clearer picture expected in two months as launches materialize.
- From the existing pipeline of 19.29 million sq ft, combined with 5.5 million sq ft expected in H2 FY25, management targets 10 million sq ft of launches in FY26 across Bengaluru and other cities.
- Management targets overall company EBITDA margins exceeding 20%, with real estate segment margins in the 22-25% range. Contracts and manufacturing margins expected to improve from current ~6% as older civil and glazing projects complete.
- Q3 expected to see 3.5 million sq ft (Townpark), 1.1 million sq ft (RERA approved), and 0.7 million sq ft project launch. Q4 includes sustenance launches and Pune/Noida projects pending approvals.
Risks flagged
- 67% of current inventory is above INR 4 crore ticket size, leading to slower absorption. While management views this as expected for premium players, HDFC Securities questioned whether contributions from large launches (INR 8,000-9,000 crore) have been disappointing. Management acknowledged relooking project configuration for one or two projects.
- Multiple analysts questioned delays in RERA approvals in Bengaluru. Management acknowledged 'these issues keep coming up' citing elections, regulatory changes, and government transitions. While one project (1.1 million sq ft) has received RERA for November launch, other approvals remain pending.
- Analyst Ankit Gupta from Bamboo Capital asked about slowdown signs in luxury real estate (INR 3-4 crore+ homes), drawing parallels to luxury car sales weakness. Management acknowledged the market may be 'reaching a steady state instead of continuous increase in demand' but maintained confidence in Bengaluru and Gurugram due to job creation.
- When HDFC Securities' Parikshit Kandpal specifically asked CFO Yogesh Bansal for the book value of the 1,878 acres of land under consolidation, management deflected: 'We do not have the number exactly, but we will circle back and provide you that number.' This leaves a significant asset class unquantified.
Key quotes
- 67% of our inventory right now is over 4 crores. Typically, the larger ticket size sales we have seen is the pace of sale is over the period of the project, and hence, it is an expected thing that we would be able to do the sales of these projects over the course of the project.
- Our goal for our EBITDA margin is going in the medium to long term, which is probably I can will not be able to clearly guide you for the next year or in the next half or next year. But over a period of time, our aim is to take our EBITDA margins to over 20%.
- In contracts, the main reduction of margins has been in civil and in glazing, which are contract-based. But the other, which are electrical, plumbing, and even interiors and concrete products, they are performing much better.
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