Sobha Q3 FY26: Record ₹2,115 Cr Sales Despite Revenue Decline
Record Sales, Compressed Margins
Sobha Limited reported net profit of ₹15.42 crore in Q3 FY26 (quarter ended December 2025), compared to ₹21.7 crore in the same period last year, marking a 28.9% year-on-year decline. Yet the developer's sales performance contradicted this margin compression: Sobha reported its highest-ever sales value in Q3 FY26 at ₹2,115 crore, up 52 per cent year on year.
The divergence reflects structural timing challenges in the business cycle. Delays in securing occupancy certificates (OCs) were attributed to the drop in revenue, alongside a larger scale of unsold inventory in the December quarter of 2025 versus the year before. Despite these headwinds, the company's sales momentum on new bookings suggests underlying market strength.
Unit Volumes and Pricing Rise
The company sold 1.37 million square feet during the quarter, up 35 per cent from a year earlier, while average price realisation stood at ₹15,436 per square foot. This marks a meaningful increase in both volume and unit economics, driven by flagship launches and concentrated demand in Bangalore.
Geography: Bangalore Dominates Nine-Month Run
Bangalore led the sales with a contribution of ₹15.12 billion, supported by the successful launch of Sobha Magnus. The NCR region contributed ₹3.49 billion, driven by the launch of Sobha Strada in Gurgaon, while the Kerala region added ₹1.54 billion. For the nine-month period, Sobha's real estate sales reached an all-time high of ₹6,097 crore, signaling sustained demand across its existing and new markets.
Mumbai Entry and Expansion
A significant milestone this period was entry into the vibrant Mumbai market with the launch of Sobha Inizio, expanding real estate presence to 13 cities across India. The Mumbai project marks the developer's first residential offering in one of India's largest metropolitan centres, diversifying geographic concentration previously centred on Bangalore and NCR.
Execution and Deliveries
In Q3, the company completed 915 homes, taking cumulative deliveries for the first nine months to 2,100 homes. Execution rates remain consistent with prior periods, though OC delays have pressured quarterly revenue recognition. Manufacturing and contracting businesses continued to perform steadily, strengthening the backward-integrated execution model that ensures quality.
Balance Sheet and Capital Efficiency
Net debt continued to decline and stood at a negative ₹792 crore, translating into a net debt-to-equity ratio of -0.17. The company's cash-generative model—underpinned by collections that rose sharply to ₹5,809 crore in 9M FY26, registering a 32 per cent growth compared with the same period last year—provides flexibility for reinvestment and new project launches.
Full-Year Trajectory
Sobha reported a profit after tax (PAT) of ₹102 crore in the first nine months of FY26, marking a robust 89 per cent year-on-year growth over 9M FY25. This nine-month profitability, though tempered by Q3's OC-related headwinds, indicates the quarter's compression is cyclical rather than structural. Management confidence is reflected in continued project expansion and new city entry, with plans to accelerate deliveries in the final quarter.