Sobha Q2 Profit Falls 55% to ₹33 Crore as Revenue Drops 31%

What happened

Sobha Limited released its consolidated results for the September 2026 quarter through a filing with the Bombay Stock Exchange on Monday, 19 October 2026. Net profit for the quarter was about ₹33 crore, against about ₹72.5 crore in the same quarter of the previous year. Total income for the quarter fell to ₹1,017.21 crore from ₹1,469.32 crore.

On a sequential basis, profit after tax fell 35.2% and revenue from operations fell 24.3% from the June 2026 quarter, when net profit was ₹50.85 crore on revenue of ₹1,278.15 crore.

Revenue, profit and margins

Revenue from operations fell to ₹967.06 crore. EBITDA fell to ₹68.73 crore from roughly ₹95.6 crore to ₹96 crore a year earlier. Reports differ on the size of the EBITDA decline, with figures ranging from about 28% to 32%. The company's EBITDA margin was 7.1%, compared with 6.8% a year earlier, according to IANS.

For the first half of the financial year, net profit was ₹83.80 crore, compared with ₹86.14 crore a year earlier. First-half revenue was ₹2,347 crore, down 1% year on year.

Average price realisation in the quarter was ₹15,522 per square foot. For the first half it was ₹15,604 per square foot.

Bookings are rising while reported revenue falls

The results show a gap between sales and reported income. Sobha's first-half sales bookings reached a record ₹5,862.4 crore, up 47%. Sales volume for April to September was 3.76 million sq ft, against 2.84 million sq ft a year earlier, an increase of 32.4%. The company sold 2,260 units in the period.

Analysts and reporters have tied the decline in revenue and profit to the timing of revenue recognition on ongoing projects. Bookings signed in one period do not add to reported revenue in the same period. Bengaluru contributed 57.7% of first-half sales.

Managing Director Jagadish Nangineni attributed the first-half performance to customer trust, the brand and project execution, and said the company is focused on new project launches.

Launches and pipeline

In the first half the company launched 7.92 million sq ft of saleable area across five projects in Bengaluru, Gurugram and Calicut. In the second quarter it launched two projects, in Mysuru and Kozhikode. The first-quarter launches included Sobha OneWorld in east Bengaluru and Sobha Crescent in Gurugram.

The company said its pipeline of forthcoming launches covers 20.42 million sq ft, with an estimated sales potential of ₹31,353 crore. It expects to recognise revenue of ₹22,041 crore from units already sold, and projects project-level EBITDA margins of more than 30%.

Fire and safety division acquisition

The board approved the acquisition of the fire and safety division of Sobha Projects and Trade Private Limited for ₹127 million, on 19 October 2026. The deal is a slump sale with cash consideration of ₹127 million. It is classed as a related-party transaction on arm's length terms, with an indicative completion period of three months.

Management said the division has been delivering about 70% of its business to Sobha itself. The deal would not require capital expenditure, although working capital may be needed. The company says the transaction aims at backward integration, operational efficiencies and greater scalability.

Legal and tax matters

The company's filings refer to an Enforcement Directorate investigation that led to the provisional attachment of land parcels valued at ₹201.61 crore, held by its subsidiary Technobuild Developers Private Limited. Sobha is appealing the order. The filings also refer to outstanding income tax demands following search operations conducted in March 2023.

A separate dispute concerns a customer that terminated a project development contract in earlier years and sought compensation of about ₹295.61 crore, along with forfeiture of a performance guarantee of ₹22.73 crore and deposits of ₹2.60 crore. The subsidiary has filed an arbitration petition challenging the termination and seeking compensation for business losses and other receivables.

What it means for buyers and investors

For investors, the main question is how quickly record bookings turn into recognised revenue and profit. Bookings for the first half are at a record level, and collections reached ₹4,009 crore. Reported revenue and profit for the quarter, however, fell sharply.

The stock closed at ₹1,176 on 19 October 2026, down 1.04% on the day. It has fallen about 3% over the past month and 19.5% so far this year.

The results do not change the terms on which existing buyers hold their homes. The filings do not describe changes to pricing or possession schedules.

What comes next

The company held an analyst and investor call on 19 October 2026 to discuss the quarter. The fire and safety division acquisition is expected to complete within about three months of the board decision. Management has said it plans to build on current momentum through upcoming launches.

The company has already achieved close to 59% of its full-year bookings guidance of ₹10,000 crore, according to the filings. Investors will be watching whether the conversion of bookings into revenue picks up in the coming quarters.