Sobha Limited demonstrated robust growth momentum in its third quarter performance, with total bookings surging 52% year-on-year and 11% quarter-on-quarter to reach ₹21.20 billion, according to Motilal Oswal's latest research report. Despite the strong growth trajectory, the bookings fell short of analyst estimates by 29%.

Strong Quarterly Performance Metrics

The company's financial performance showed consistent growth across multiple parameters during the quarter:

Regional Performance Analysis

Bangalore continued to be the primary revenue driver for Sobha, accounting for 71.5% of total sales during the quarter. The region generated ₹15.00 billion in sales, marking a substantial 51% year-on-year increase, with SOBHA Magnus project leading the strong performance.

The National Capital Region (NCR) emerged as a standout performer, contributing ₹3.50 billion to quarterly sales, representing 16% of total Q3 sales. This segment recorded exceptional growth of 144% year-on-year, primarily driven by the SOBHA Strada project.

Kerala operations contributed ₹1.50 billion, representing 7% of Q3 sales with a modest 18% year-on-year growth.

Analyst Outlook and Investment Recommendation

Motilal Oswal has maintained its positive stance on the stock, reiterating a BUY rating with a revised target price of ₹1,825. This target price indicates a potential upside of 19% from current levels, reflecting confidence in the company's growth trajectory and market positioning.

The brokerage firm's recommendation is based on the company's consistent booking growth, strong regional performance, and successful project execution across key markets. The nine-month performance of ₹61.00 billion in total bookings, up 37% year-on-year, demonstrates the company's ability to maintain growth momentum throughout the fiscal year.

Sobha Ltd has provided updated financial guidance, projecting stronger performance in Q4 alongside its previously announced revenue forecasts for FY26. The real estate developer expects significant earnings recovery while maintaining its diversified business outlook across multiple segments.

Q4 Performance Expectations

The company anticipates stronger profits in Q4, driven by revenue recognition from delayed projects:

Project Margin Projections

Sobha Ltd has outlined its net margin expectations based on project duration, indicating differentiated profitability across its portfolio:

FY26 Revenue Outlook

The company maintains its earlier projections for FY26, presenting contrasting trends across business segments:

Business Performance Strategy

The updated guidance demonstrates Sobha Ltd's ability to manage project timelines and revenue recognition effectively. The differentiated margin structure based on project duration suggests the company's strategic approach to optimizing profitability across its development portfolio. While the non-real estate segment shows strong growth potential for FY26, the anticipated Q4 recovery from delayed revenues indicates improved operational execution in the near term.