Sobha Ltd consolidated net profit plunged 50% YoY to INR 6.06 crore in Q1 FY25, down from INR 12.05 crore a year ago, as total income declined to INR 669.85 crore from INR 939.24 crore. Despite reduced revenue, sales rose 28% YoY to INR 1,874 crore, with Gurgaon and Bangalore contributing significantly. Sobha sold 562 units, achieving an average price realisation of INR 15,941 per sq ft. The company's debt-equity ratio improved to 0.47, marking 15 quarters of debt reduction. Sobha plans to launch 18.30 million sq ft of residential projects to drive future growth.
Sobha Ltd, a prominent real estate firm based in Bengaluru, reported a significant decline in its consolidated net profit for the first quarter of FY25, dropping by 50% year-on-year (YoY) to INR 6.06 crore, compared to INR 12.05 crore in the same period last year. This decline in profitability was linked to lower revenue during the quarter, which fell to INR 669 crore from INR 901 crore in Q1 FY24. The company's total income also saw a reduction, declining to INR 669.85 crore from INR 939.24 crore in the corresponding quarter of the previous financial year.
Despite the dip in profits and revenue, Sobha reported a strong performance in terms of sales and collections. The company's quarterly sales increased by 28% YoY, reaching INR 1,874 crore, with significant contributions from key markets. Gurgaon emerged as the leading contributor, accounting for 45.5% of the total sales value, followed by Bangalore at 33.5%. Kerala also showed positive growth, with a 5.8% increase in sales value compared to the previous year.
Sobha's ability to maintain a strong market presence is reflected in its sales figures and the average price realisation, which stood at INR 15,941 per square foot during the quarter. The company sold 562 units, covering a total saleable area of 1.17 million square feet across various regions in Q1 FY25. This increase in price realisation is largely due to a strategic shift in inventory mix towards luxury and super-luxury projects.
In addition to its sales performance, Sobha continued its focus on debt reduction, achieving its 15th consecutive quarter of debt reduction, bringing its debt-equity ratio down to 0.47. The company also launched four new residential projects during the quarter, adding a total saleable area of 3.04 million square feet.
Looking ahead, Sobha is poised for further growth with a strong pipeline of 18.30 million square feet of residential projects planned for launch in the coming quarters. The company's Managing Director, Jagadish Nangineni, expressed confidence in the future, highlighting that the recently concluded rights issue will strengthen Sobha's financial and operational strength, enabling it to capitalise on growth opportunities and expand into new markets within India's dynamic economic landscape.
Sobha Ltd experienced a 50% decline in its merged net profit for Q1 FY25 due to reduced revenue and total income. Despite this drop, the company showed strong sales performance with a 28% increase in quarterly sales and successful debt reduction. Sobha's strategic shift towards luxury projects and its planned expansion into new markets position it well for future growth, supported by a strong pipeline of residential projects and a recent rights issue aimed at enhancing financial stability.
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