Macrotech Developers gains after CRISIL upgrades rating to 'AA-/ A1+' with 'positive' outlook

Macrotech Developers advanced 2.71% to Rs 1412.15 after CRISIL Ratings has upgraded its ratings on the bank facilities of the company to 'CRISIL AA-/Positive/CRISIL A1+' from 'CRISIL A+/Stable/CRISIL A1'.

CRISIL said that the rating action reflects CRISIL Ratings expectation of continued improvement in operating performance with maintenance of healthy sales momentum while sustaining strong financial risk profile.

The operating performance witnessed improvement with the company recording sales of 111.0 lakh square feet (sq. ft) for fiscal 2024 valued at Rs 14,520 crore (includes annuity income), an improvement of 18% and 20% respectively, over fiscal 2023.

Healthy sales booking trajectory coupled with timely construction progress resulted in collection of Rs 10,140 crore and cash flow generated from operations of Rs 5,176 crore (excluding cash inflows of UK business) for fiscal 2024.

This is expected to remain strong going forward as well, supported by a healthy launch pipeline, strong operating margin in ongoing projects and good proportion of ready-to-move inventory (RTMI).

The companys financial risk profile has also improved substantially driven by continued focus on deleveraging while maintaining strong operating performance.

In addition to strong performance, MDL successfully raised Rs 3,280 crore in March 2024, via qualified institutional placement (QIP), which has further reduced its net debt to Rs 3,010 crore as on 31 March 2024 (approximately Rs 6,290 crore in the absence of said QIP).

The net debt to equity and net debt to operating cash flow ratios stand improved at 0.17 time and 0.58 time, respectively, from 0.56 time and 1.38 times, respectively, in fiscal 2023. Net debt to equity is expected to remain below 0.50 time going forward in line with management articulation.

The ratings continue to reflect MDLs established brand and strong market position in the real estate segment in Mumbai Metropolitan Region (MMR) and comfortable financial risk profile.

These strengths are partially offset by geographical concentration of revenue and susceptibility to cyclicality and regulatory risks in the real estate sector.

Macrotech Developers is one of the largest real estate developers in India. It has developed properties around 1000 lakh square feet mostly in Mumbai Metropolitan Region (MMR) market.

The companys consolidated net profit declined 10.6% to Rs 665.5 crore in Q4 FY24 as against Rs 744.4 crore recorded in Q4 FY23. However, revenue from operations jumped 23.44% year on year (YoY) to Rs 4,018.5 crore in the quarter ended 31 March 2024.

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