Sobha (SOBHA) Q2 24/25 earnings summary

Executive summary

• Achieved H1 FY25 real estate sales of INR 30.52 billion, with Bengaluru contributing 40% and the rest of India 60%; Q2 FY25 sales were INR 11.79 billion.

• Kerala posted its best-ever quarterly and half-yearly sales, with a 32% YoY increase in average price realization, driven by Gurugram projects and price hikes.

• Rights issue of INR 19.99 billion completed, oversubscribed 1.39x, reducing net debt to INR 2.8 billion.

• Launched 5 projects (3.5 mn sq ft) and completed 1.79 mn sq ft (1,127 homes) in H1 FY25.

• No material impact from a ransomware attack during the quarter; systems restored and no data loss occurred.

Financial highlights

• H1 FY25 total revenue: INR 16.35 billion (real estate: INR 12.56 billion; contracts/manufacturing: INR 3.17 billion).

• Q2 FY25 revenue up 25% YoY to INR 9.65 billion; real estate contributed 80.9%.

• H1 FY25 EBITDA: INR 1.94 billion, margin 11.9%, up 19% YoY.

• Net debt reduced by INR 9.08 billion to INR 2.80 billion as of September 30, 2024; net debt-to-equity ratio at 0.08.

• Operational cash inflow for H1 FY25: INR 29.21 billion, up 4% YoY; real estate collections up 8.6% to INR 26.14 billion.

Outlook and guidance

• Targeting INR 8,500 crores in sales for FY25, contingent on timely launches in the next five months.

• Expecting to launch 5.5 million sq ft in H2 FY25, with a total of 9 million sq ft for the year.

• FY26 launch pipeline of 10 million sq ft.

• Projected cashflow from ongoing and forthcoming projects estimated at INR 161.22 billion.

• EBITDA margin goal over 20% medium to long term; real estate segment margin expected at 22-25%.