Sobha's Q4 profit more than doubled, but margins remain below peers
Profit growth benefited from a lower tax rate and sizeable other income, while the operating margin recovered from Q3FY26.
Filed 04 May 2026, 19:45 IST · after market close · Sobha Ltd (SOBHA)
Key takeaways
- Sobha's consolidated net profit rose 124.74% YoY to Rs 91.83 cr in Q4FY26.
- Operating margin improved 3.55 percentage points QoQ to 7.66% as revenue growth outpaced expense growth.
- Other income contributed 34.48% of pre-tax profit, while operating margin remained 7.15 percentage points below the 93-peer sector median.
Price around the results
Profit growth outpaced the operating improvement
Sobha's consolidated revenue grew 60.23% YoY while expenses rose 60.10%, allowing operating profit to increase 61.78%. Net profit grew faster at 124.74%, helped by a 2.74 percentage-point decline in the tax rate. Other income accounted for 34.48% of pre-tax profit, making it a meaningful contributor to reported earnings.
Q4 margin recovery came despite higher interest
Sequentially, revenue increased 110.77% and expenses rose 102.98%, so costs did not grow as fast as revenue and operating margin widened 3.55 percentage points. Interest expense nevertheless rose 45.05% QoQ, partly offsetting the operating improvement. Year on year, interest expense declined 2.38%, while operating margin was broadly stable, improving 0.08 percentage points.
Margin recovered from Q3 but still trails the sector
The 7.66% operating margin recovered from 4.11% in Q3FY26 and 2.80% in Q1FY26, after reaching 6.79% in Q2FY26; this was a rebound rather than a third consecutive quarterly decline. It remained 7.15 percentage points below the 14.81% median for 93 Consumer Discretionary peers that had reported, placing Sobha 15th from the bottom on this measure.
The initial market reaction was milder than Sobha's usual move
The results were filed after market close; the stock opened 4.00% higher the next session but ended up 0.41%, with an 11.27-times volume ratio. Its one-day move was smaller than the 1.72% median absolute move after the past eight results, when the stock rose three times and fell five times. The gain extended to 0.79% on day one, but the stock was down 3.20% by day five and 1.75% by day 30.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹1,988 cr | ₹943 cr | +110.77% | +60.23% |
| Other income | ₹42 cr | ₹40 cr | +5.61% | +39.38% |
| Expenses | ₹1,836 cr | ₹904 cr | +102.98% | +60.10% |
| Operating profit | ₹152 cr | ₹39 cr | +292.70% | +61.78% |
| Operating margin (%) | 7.66% | 4.11% | — | — |
| Interest | ₹44 cr | ₹30 cr | +45.05% | -2.38% |
| Depreciation | ₹28 cr | ₹28 cr | +2.85% | +23.94% |
| Profit before tax | ₹122 cr | ₹21 cr | +493.08% | +116.62% |
| Tax | ₹30 cr | ₹5 cr | +485.52% | +94.79% |
| Net profit | ₹92 cr | ₹15 cr | +495.14% | +124.74% |
| EPS (₹) | ₹8.59 | ₹1.44 | +496.53% | +124.28% |
Operating margin of 7.66% compares with a Consumer Discretionary sector median of 14.81% across 93 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +0.41% | +0.77% |
| Next session | +0.79% | — |
| 5 sessions | -3.20% | -0.13% |
| 15 sessions | -1.49% | — |
| 30 sessions | -1.75% | — |
Volume on the results session was 11.27× its 20-day average.
What to watch
- Whether operating margin holds above 7.66% after the Q4FY26 recovery.
- Whether interest expense growth moderates from the 45.05% QoQ increase.
- Whether other income remains close to 34.48% of pre-tax profit.