Sobha Limited delivered mixed Q3 FY26 results, achieving record quarterly sales while experiencing a decline in profitability amid increased operational expenditure. The company posted a quarterly profit after tax (PAT) of ₹15.40 crores, down from ₹21.60 crores in Q3 FY25, marking a 29% year-on-year decline. Revenue fell to ₹943.10 crores from ₹1,224 crores, representing a 23% drop, while EBITDA contracted 42% to ₹38.90 crores.

Record Sales Performance Despite Financial Challenges

Despite the dip in financial metrics, Sobha achieved its highest-ever Q3 sales value of ₹2,115 crores, representing a remarkable 52% year-on-year and 11% quarter-on-quarter growth. The new area sold stood at 1.37 million square feet, up 35% YoY, with an average price realisation of ₹15,436 per square foot.

Increased Construction Costs and Strategic Land Investments

The company reported increased construction costs and sales expenditure during Q3 FY26 and the first nine months, aligning with the robust sales growth trajectory. Net land payments totaled ₹240 crores in Q3 FY26 and ₹872 crores for the first nine months, signaling the company's commitment to strengthening its growth pipeline through strategic land acquisitions.

Operational Achievements and Project Completions

The company completed 915 homes during the quarter, contributing to cumulative nine-month deliveries of 2,100 units. Bangalore emerged as the strongest performer, contributing ₹15.12 billion or 71.5% to Q3 FY26 sales value, representing the highest ever quarterly performance for the region. Gurgaon showed impressive growth with sales value increasing by 119.2% over Q2 FY26, supported by the successful launch of SOBHA Strada.

Management Commentary and Future Growth Strategy

Managing Director Jagadish Nangineni noted that procedural delays in securing Occupancy Certificates (OCs) had temporarily moderated quarterly profitability. However, he expressed confidence in accelerating project completions and sustaining momentum in the coming months. The company launched three significant projects during Q3 FY26 with total saleable area of 931,171 square feet, including SOBHA Strada in Gurgaon, SOBHA Magnus in Bangalore, and SOBHA Inizio in Mumbai.

Strong Development Portfolio and Future Outlook

Sobha's real estate development portfolio spans 89.99 million square feet of total developable area, with 65.26 million square feet completed and 36.82 million square feet under development across 27 cities and 14 states. The company maintains 422 acres of developable land bank with development potential of 42.79 million square feet. The projected marginal cashflow from visible inventory stands at ₹90.64 billion from completed and ongoing projects, with additional ₹73.09 billion from forthcoming projects.

SOBHA Limited has submitted its monitoring agency report for the quarter ended December 31, 2025, demonstrating compliant utilization of its rights issue proceeds. The report, prepared by ICRA Limited as the monitoring agency, confirms no deviation from the objects disclosed in the offer document.

Rights Issue Overview

The company conducted a rights issue during June 28 to July 4, 2024, raising ₹1,999.03 crore. The net proceeds credited to the monitoring account stood at ₹1,984.25 crore as on December 31, 2025, as part payment has been received against the rights issue.

Proceeds Utilization Status

The monitoring report reveals that ₹1,744.56 crore has been utilized across various objects as of December 31, 2025, leaving ₹252.74 crore unutilized. The utilization pattern shows strategic deployment across the company's stated objectives.

Complete Debt Repayment Achievement

The company has successfully completed the repayment of borrowings worth ₹905.00 crore, representing 100% utilization of the allocated amount for this object. This strategic move strengthens the company's balance sheet by reducing debt obligations.

General Corporate Purpose Deployment

Under general corporate purposes, SOBHA has deployed ₹632.09 crore across various operational requirements. The major components include:

• Land Purchases: ₹206.90 crore across multiple quarters
• Employee Expenses: ₹233.22 crore spanning Q2FY25 to Q1FY26
• Refundable Deposits: ₹164.70 crore for operational requirements
• Other Expenses: Including approvals, marketing, and IT-related expenses

Unutilized Funds Management

The company has prudently invested the unutilized proceeds of ₹252.74 crore in fixed deposits across multiple banks. These investments are generating returns ranging from 3.25% to 7.30% annually, with total earnings of ₹1.88 crore during the quarter.

Compliance and Timeline Adherence

ICRA Limited confirmed that all utilizations align with the offer document disclosures, with no material deviations requiring shareholder approval. The implementation timeline for all objects remains on schedule as per the FY2025-FY2028 timeframe outlined in the offer document. The monitoring agency found no unfavorable events affecting the viability of the stated objects, maintaining the integrity of the rights issue framework.