Shares of Sobha Limited surged by nearly 6% on Monday, November 18, 2024, hitting an intraday high of ₹1,623 per share. The significant jump in the company's share price followed a stellar performance in its Q2 results for the financial year 2025 (Q2FY25). This rise is a testament to the strength of the company's business model and its continued success in the highly competitive real estate sector.
For those involved in share market investment, this positive outcome highlights the importance of staying informed on key earnings reports.
Q2FY25 profit sees substantial growth
Sobha Limited’s profit for Q2FY25 saw a remarkable 74.5% year-on-year (Y-o-Y) increase, reaching ₹26 crore, compared to ₹14.9 crore in the same period last year. This growth reflects the company’s ability to navigate the market's challenges while maintaining a strong financial position. The surge in profit was also accompanied by a solid rise in revenue, which grew by 25.9% Year-on-Year, amounting to ₹933.5 crore in Q2FY25, up from ₹741.2 crore in Q2FY24.
The results indicate that Sobha Limited is benefiting from a combination of factors, including a surge in demand for residential real estate and the geographical diversification of its projects. This has allowed the company to cater to a wide customer base across the 11 cities it operates in, contributing to increased revenue and profit.
Operational performance and sales insights
On the operational front, Sobha’s earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 2.3% Y-o-Y, reaching ₹77 crore in Q2FY25. While the EBITDA growth was positive, the EBITDA margin saw a slight contraction of 190 basis points, dropping from 10.2% in Q2FY24 to 8.3% in the latest quarter.
Despite the margin squeeze, Sobha’s sales performance remained strong. The company reported a quarterly sales value of ₹1,178 crore, with an average price realisation of ₹12,674 per square foot, marking a 24% increase compared to the same period last year. This solid performance further emphasises Sobha’s dominance in the luxury real estate sector and its capacity to achieve premium pricing in a competitive market.
Management’s outlook and strategic direction
In a statement, Jagadish Nangineni, Managing Director of Sobha, highlighted the company’s strong operational performance and its ability to meet demand in various markets. The company’s diverse project portfolio across multiple cities and its successful rights issue have strengthened its financial position, positioning it well for continued growth.
Nangineni also mentioned that Sobha’s focus on delivering high-quality residences and services through its integrated operating model would remain a key strategy as the company continues to scale. With international recognition and an expanding footprint in cities like Dubai and Oman, Sobha Limited is well-positioned to ride the growth wave in the real estate sector.
Sobha’s growth trajectory and market prospects
Founded in 1995 by PNC Menon, Sobha Limited has established itself as one of India’s leading real estate developers. With operations in 27 cities in 14 states and an expanding international presence under Sobha Realty, the company continues to demonstrate its ability to grow both in India and abroad.
As Sobha Limited moves forward, it will likely continue to attract interest from those engaged in share market investment. With its diversified portfolio of luxury residential properties and a strong pipeline of ongoing projects, the company appears well-equipped to maintain its momentum in the highly competitive real estate market.
For android only