Sobha Q2 FY27 Results (NSE: SOBHA)
Signal: Revenue declined
The read
The earnings trajectory has sharply weakened after Q1FY27: revenue fell 38.7% YoY and 27.7% QoQ, with real estate driving the decline and PAT dropping 80.0%; the contractual and manufacturing turnaround was insufficient to offset the real-estate slowdown, while negative H1 operating cash flow of ₹3,812.38 million and higher finance costs add balance-sheet pressure.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹909.68 Cr | -38.7% | -27.7% |
| Net profit | ₹20.71 Cr | -80.0% | |
| EPS | ₹1.94 | -80.0% |
P&L walk
Revenue declined 38.7% YoY to ₹9,096.76 million, led by a 47.2% fall in real-estate segment revenue; PAT dropped 80.0% to ₹207.09 million as finance costs rose 26.8% and other income of ₹582.45 million remained material relative to PBT of ₹289.52 million.
Segments
Real estate was the main drag: revenue fell 47.2% YoY to ₹6,489.86 million and segment result fell 55.0% to ₹757.08 million, while contractual and manufacturing revenue grew 2.8% and segment result rose 91.1% to ₹600.98 million.
Key positives
- Contractual and manufacturing segment result rose 91.1% YoY to ₹600.98 million and 57.4% QoQ, providing a partial offset to the real-estate decline.
- Property, plant and equipment increased from ₹4,409.41 million to ₹5,041.18 million while depreciation rose 22.3% YoY to ₹308.78 million, a clean depreciation-to-asset-base cross-check.
- EPS tracked PAT, both declining 80.0% YoY, with no evidence of dilution-driven divergence.
Key concerns
- Real-estate revenue fell 47.2% YoY to ₹6,489.86 million and segment result fell 55.0% to ₹757.08 million, making the core business the dominant earnings drag.
- Revenue declined 38.7% YoY while total expenses declined only 33.4%, indicating negative operating absorption; the filing does not disclose an EBITDA or operating margin.
- H1 operating cash flow was negative ₹3,812.38 million versus positive ₹4,062.51 million in the prior-year period, while inventory rose to ₹132,204.42 million from ₹118,694.99 million.
- Finance costs increased 26.8% YoY to ₹396.37 million despite the 38.7% revenue decline.
- Other income of ₹582.45 million was twice reported PBT of ₹289.52 million, making the quarter's low PAT more dependent on non-operating income than the PBT line alone suggests.
Research and educational content only. Not investment advice.