| Kolte-Patil Developers Limited | ||||||
| Ratings upgraded to 'CRISIL AA-/Stable/CRISIL A1+'; 'CRISIL AA-/Stable' assigned to Non Convertible Debentures | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on CRISIL Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has upgraded its ratings on the bank facilities and existing non convertible debentures of Kolte-Patil Developers Limited (KPDL; flagship company of the KPDL group) to ‘CRISIL AA-/Stable/CRISIL A1+’ from ‘CRISIL A+/Positive/CRISIL A1’. CRISIL Ratings has also assigned its ‘CRISIL AA-/Stable' rating to the Rs.134.2 crore non convertible debentures of KPDL.
The upgrade in rating reflects sustenance of improvement in KPDL’s business risk profile over the medium term, with continuation of a healthy financial risk profile. The improvement in business risk profile will be driven by strong saleability in the ongoing projects and a significant launch pipeline over the medium term. The sales (in value terms) for fiscal 2025 are expected to reach ~Rs. 3300-3500 crores and witness a ~20% increase from fiscal 2024 levels, while maintaining the low debt levels.
Additionally, revenue diversity is expected to strengthen this fiscal with an increase in launches outside Pune resulting in sales from non-Pune markets increasing to around 20-25% in current fiscal, up from ~5% in fiscal 2024, subject to necessary approvals being in place. Collections, too, are expected to grow by ~25-30% in fiscal 2025 and ~20-25% in fiscal 2026, indicating strong cash generation from sold projects.
The company had achieved all time high sales and collections of Rs 2822 crore and Rs 2070 crore (including DMA Collections), respectively in FY2024, which is a healthy ~26% and ~9% growth respectively in sales (in value terms) and collections over FY2023. Launch pipeline for FY2025 stands at healthy levels of ~8.92 msf.
Financial risk profile remained strong in fiscal 2024 and it is expected to remain healthy in the medium term, with Debt/Cash Flow from Operations (CFO) (Adj.) likely to remain at 1.3-1.4 times in fiscal 2025. Composition of debt will include 54% as long-term bank/NBFC debt and remaining in the form of NCDs, the payment of which is linked to collections in the underlying projects. KPDL has partnered with some marquee investors for its projects and has onboarded Marubeni Corporations and Motilal Oswal. Committed receivables as a % of construction cost and debt servicing outflows for the medium term remains strong at ~70% as on March’24.
The ratings continue to reflect the KPDL group’s established track record of over three decades and strong brand and market position in Pune market, healthy salability of the projects and healthy collections. These strengths are partially offset by geographical concentration in revenue and exposure to risks and cyclicality inherent in the real estate sector. |
Analytical Approach CRISIL Ratings has combined the business and financial risk profiles of all ongoing and planned projects in KPDL, its subsidiaries and associate companies. All the entities, collectively referred to as the KPDL group, are in the same business, have common promoters and share significant operational, managerial and financial linkages.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers & Detailed Description Strengths:
Weaknesses:
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Liquidity: Strong Liquidity is supported by cash and cash equivalents of Rs. 503 crore as of March 31, 2024 and undrawn bank lines of over Rs. 333 crore as on Jun 30,2024 CRISIL Ratings notes that the composition of debt includes 54% as long term bank/NBFC debt and remaining in the form of NCDs from the private equity partner, the payment of which is linked to collections in the underlying projects.
The liquidity position is further supported by the healthy sales and collections from the ongoing projects and financial flexibility in the form of unencumbered land bank. |
Outlook: Stable CRISIL Ratings believes that the company will increase the scale of operation in the medium term duly supported by significant launch pipeline along with heathy salability in the ongoing projects, while maintaining a low leverage. |
Rating Sensitivity factors Upward factors:
Downward factors:
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About the Group Incorporated in 1991, KPDL is promoted by Mr Rajesh Patil, Mr Naresh Patil and Mr Milind Kolte. The KPDL group is one of the largest residential real estate developers in Pune. The company has a healthy project portfolio of affordable and mid-income, and luxury residential segments through its brands, Kolte-Patil and 24K, respectively, and is expanding its presence in Bengaluru and Mumbai.
The group has developed over 28 million sq ft of projects, and as on March 31 , 2024, ~3.08 million sq ft is ongoing unsold inventory spread across Pune, Mumbai and Bengaluru. It is expected to launch projects encompassing 8.92 msf in fiscal 2025. The projects are undertaken under KPDL or separate special purpose vehicles, with KPDL being the majority shareholder in the projects. |
Key Financial Indicators (Consolidated)
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
*Emergency Credit Line Guarantee Scheme ##Yet to be issued |
Annexure – List of entities consolidated*
*Details as on March 31, 2024 |
| Annexure - Rating History for last 3 Years | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||
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Criteria Details
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