Sobha Limited Q1 FY27 Earnings Call Summary

Event Participants

Executives

2 Jagadish Nangineni, Yogesh Bansal

Analysts

7 Biplab Debbarma, Fenil Brahmbhatt, Girish Choudhary, Parikshit Kandpal, Pritesh Sheth, Puneet Gulati, Shubham Selvadia

Financials & KPIs

Geographic & Segment Commentary

Bengaluru: Contributed 57% of Q1 presales (₹2,067 crores), driven by SOBHA One World launch (3.4 million sq ft released from 3,484 homes across 47.4 acres; ~40% sold at launch). Four projects (3 million sq ft) planned in the remaining FY27 launch pipeline, with the majority of incremental land allocation also earmarked for Bengaluru.

NCR: Record quarterly sales of ₹1,384 crores, led by SOBHA Crescent in Gurgaon (60% sold in Q1). Crescent Phase 2 is slated for Q3/early Q4 FY27, and a Greater Noida joint development acquisition was completed with launch expected this financial year.

Mumbai: Acquired a ~1.3-acre land parcel for ~₹180 crores (adjacent to the Inizio project). Combined GDV with Greater Noida is ₹2,700–3,000 crores; launch timeline is uncertain due to approvals and is excluded from the FY27 launch guidance.

Hyderabad & Kerala: One Hyderabad project (1.7 million sq ft) and two Kerala projects (1.5 million sq ft) are planned for launch in the remaining FY27 period.

Company-Specific & Strategic Commentary

Backward-Integrated Model: Other businesses (contractual, manufacturing, retail) generated ~₹170 crores revenue in Q1 with good order book visibility; commercial rental income was ~₹23 crores. FY27 revenue from these businesses is expected to be similar to FY26.

Land Acquisition & Capital Allocation: Invested ₹370 crores in land during Q1, including new outright purchase in Mumbai and a JD in Greater Noida; FY27 land investment guided at ₹1,500–1,600 crores vs ₹1,160 crores in FY26, with typical new land value at ~15% of total sale value.

Launch Pipeline: Q1 saw 3 launches across Bengaluru and Gurgaon (6.89 million sq ft, ₹10,000 crores potential value); forthcoming pipeline stands at 20.77 million sq ft across 17 projects, with 9 projects (8.2 million sq ft, ~₹12,000 crores GDV) planned for the remaining nine months.

Cash Flow Visibility: Projected receivables from sales and unsold value of ~₹31,000 crores against ~₹19,000 crores remaining cost implies ~₹12,000 crores of projected margin cash flow from completed and ongoing projects.

Commercial Strategy: The 6 lakh sq ft Gurgaon commercial project (TDR in hand) is under evaluation for retention as a rental asset rather than outright sale; it may return to the sales pipeline if a partial-sale model is adopted.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

FY27 Presales Growth & Launch Timeline

• Question: What is the FY27 presales growth target, and can you share GDV/timing for the remaining 8.2 million sq ft of launches? (Girish Choudhary, Avendus Spark)
• Answer: ≥30% presales growth guidance maintained, with potential upside if launches stay on schedule. All 9 projects will launch within the next 9 months; Q2 includes ~3 projects (2 Kerala, 1 plotted Bengaluru + a 0.4 million sq ft Bengaluru project), with the balance in Q3/Q4. The 8.2 million sq ft translates to ~₹12,000 crores GDV at current average realisations. (Jagadish Nangineni)

Collections vs Presales Gap

• Question: Were Q1 collections modest due to end-quarter sales timing, and should they improve? (Girish Choudhary, Avendus Spark)
• Answer: Yes — new sales collections concentrated late in Q1, and milestone billing was lower due to April–May labour shortages. The ~₹2,000 crores average annual operating cash flow target remains achievable. (Jagadish Nangineni)

Land Acquisitions & Full-Year Investment

• Question: What are the FY27 land commitments, and details of the new Mumbai and Greater Noida acquisitions? (Girish Choudhary, Avendus Spark; Biplab Debbarma, Emkay Global)
• Answer: Q1's ₹370 crores included Mumbai (~1.3 acres, ~₹180 crores outright) and Greater Noida (JD with dues paid to authority/landowners); combined GDV ₹2,700–3,000 crores. FY27 land payments guided at ₹1,500–1,600 crores vs ₹1,160 crores last year; of the remaining ~₹600 crores beyond commitments, the majority is for Bengaluru with the balance split between NCR and Mumbai. (Jagadish Nangineni)

Forthcoming Projects Margin Decline

• Question: Why did forthcoming project margin fall to ₹68.3 billion from ₹86 billion in the prior presentation? (Puneet Gulati, HSBC)
• Answer: The mix shifted toward joint developments, and Hoskote (own land, high margin) was previously a key contributor. Stated GDV includes the landowner share. (Jagadish Nangineni)

Demand Outlook & Real Estate Cycle

• Question: What drove the strong demand recovery in H2 of Q1, and where is the cycle? (Parikshit Kandpal, HDFC Securities)
• Answer: Preparation for launches was the key advantage; underlying demand is stable with steady post-launch traction. Supply response is the key variable to watch. (Jagadish Nangineni)

Project-Level Performance: One World, Rivana, Crescent

• Question: What was SOBHA One World's Q1 contribution, is there spillover to Q2, and how is Rivana performing? (Parikshit Kandpal, HDFC Securities)
• Answer: One World contributed ~45% of Q1 sales; Bengaluru + NCR together ~87%. A spillover of ~₹200–300 crores into Q2 is natural for new launches. Rivana is steady with consistent monthly sales, though not a high sell-through at launch. (Jagadish Nangineni)

Margin Trajectory

• Question: Do you maintain the view of margin revival in H2 FY27, and what reported margin can we expect? (Biplab Debbarma, Emkay Global)
• Answer: Q2 may be similar to Q1; Q3 and Q4 should improve sequentially as high-margin projects complete. EBITDA margin should move from ~9.7% to ~17–20% by Q4 FY27. (Jagadish Nangineni)

NCD Issuance & Capital Raising

• Question: When will the approved ₹1,000 crores NCDs be issued? (Fenil Brahmbhatt, Choice Institutional Equities)
• Answer: Drawdown expected over the next couple of quarters in at least 2 tranches, aligned with firming up of acquisition opportunities. (Jagadish Nangineni)

Crescent Phase 2 & Gurgaon Commercial Project

• Question: Is Crescent Phase 2 planned this year, and has the 6 lakh sq ft Gurgaon commercial project been shelved? (Pritesh Sheth, Axis Capital)
• Answer: Crescent Phase 2 will launch in Q3 or early Q4 FY27. The Gurgaon commercial project (TDR in hand) is being evaluated for retention as a rental asset; it may return to the pipeline if a partial-sale model is adopted. (Jagadish Nangineni)

Karnataka Minimum Wage Impact

• Question: What is the impact of Karnataka's 60% minimum wage hike in May? (Shubham Selvadia, Tikri Investments)
• Answer: Still under evaluation; most of the technician force earns above minimum wage, so the impact should be small and absorbable within project budgets. (Jagadish Nangineni)

Key Takeaway

Sobha delivered its highest-ever quarterly presales of ₹3,656 crores (+76% YoY) in Q1 FY27, led by SOBHA One World in Bengaluru (45% of sales) and SOBHA Crescent in Gurgaon, with Bengaluru and NCR together contributing ~87%. Total income rose 48% YoY to ₹1,330 crores and PAT improved to ₹50.7 crores from ₹13.5 crores, while the balance sheet stayed net cash at ₹659 crores with 7.62% borrowing cost. Management maintained 30%+ presales growth guidance for FY27, supported by 9 launches (8.2 million sq ft, ~₹12,000 crores GDV) over the remaining nine months, and guided EBITDA margin expansion from ~9.7% to 17–20% by Q4 FY27 as high-margin projects deliver. Land investment is guided at ₹1,500–1,600 crores, including new Mumbai and Greater Noida parcels (combined GDV ₹2,700–3,000 crores). Key watch points: collection catch-up, labour-related billing delays, Karnataka's 60% minimum wage hike, and margin dilution from the rising JD mix.