Bengaluru-based real estate major Sobha Limited has announced its Q3 FY26 results, and at first glance, the numbers appear disappointing. The company reported a sharp decline in both income and profit for the December 2025 quarter. However, a deeper look reveals a contrasting narrative driven by record-breaking collections, strong sales bookings, and lower debt, suggesting that operational momentum remains intact despite accounting-led weakness.
Sobha Q3 FY26 Financial Performance
For the quarter ended December 31, 2025, Sobha Limited reported a total income of ₹983.10 crore, significantly lower than ₹1,256.88 crore recorded in the same quarter last year. This represents a year-on-year decline of nearly 22%. The slowdown was also visible at the bottom line, with net profit falling 28.69% to ₹15.43 crore, compared to ₹21.69 crore in Q3 FY25.
The decline in reported income and profit was largely attributed to the real estate revenue recognition model, under which revenues are booked only upon project completion and handover. Fewer project handovers during the quarter directly impacted the financial numbers.
Quarterly Performance Snapshot
| Particulars | Q3 FY26 (Dec 2025) | Q3 FY25 (Dec 2024) | YoY Change |
|---|---|---|---|
| Total Income | ₹983.10 crore | ₹1,256.88 crore | -21.78% |
| Revenue | ₹943.11 crore | ₹1,224.09 crore | -22.95% |
| Net Profit | ₹15.43 crore | ₹21.69 crore | -28.86% |
Operating Profit Declines, But Core Business Remains Stable
Sobha’s operating profit for the quarter stood at ₹78.50 crore, down from ₹100.20 crore in the year-ago period. Margin pressure was a natural outcome of lower revenue recognition. Despite this, management indicated that construction activity and project execution remain strong, with a clear focus on faster project completions in the coming quarters.
Managing Director Jagdish Nangineni stated that the company is actively working to accelerate project deliveries and monetize existing inventory, which is expected to support revenue recovery going forward.
read more: Motilal Oswal’s Bold Call on Infosys: 37% Upside Ahead — Is This the Best IT Stock to Buy Now?
Record Sales Bookings and Collections Steal the Spotlight
While the profit and income numbers declined, Sobha delivered a standout performance on the operational front. During Q3 FY26, the company recorded sales bookings of ₹1,823 crore, reflecting healthy housing demand. Even more significant was the cash collection of ₹1,713 crore, the highest ever in the company’s history.
The company also reported an average realization of ₹13,598 per square foot, highlighting sustained pricing power across its key markets. Strong collections helped Sobha reduce its debt levels, strengthening the balance sheet and improving financial flexibility.
Sobha Share Price Reaction and Stock Performance
Ahead of the results, Sobha shares ended the Friday session in the red. On the BSE, the stock closed at ₹1,526.85, down 1.34%, while on the NSE it settled at ₹1,532, down 1.12%. The stock’s 52-week high stands at ₹1,732.50, while the 52-week low is ₹1,520.
Over the past six months, Sobha shares have corrected by around 7%, although the stock has still delivered nearly 19% returns over the last one year, indicating longer-term investor confidence.
What Lies Ahead for Sobha Limited?
Despite weak reported earnings, Sobha’s record collections, strong sales momentum, and debt reduction point to improving business fundamentals. As more projects move closer to completion, revenue recognition is expected to pick up in subsequent quarters. The company’s focus on execution and inventory liquidation could translate into stronger financial performance over the medium term.
Final Takeaway
Sobha’s Q3 FY26 results present a classic case of accounting weakness masking operational strength. While income and profit numbers declined sharply, the company’s best-ever collections and robust sales bookings signal resilience in demand. For investors, the key trigger to watch will be project handovers in upcoming quarters, which could unlock meaningful upside in reported earnings.
Disclaimer: This article is for informational purposes only and does not constitute investment advice.
