Macrotech Developers receives ‘A/ Stable' rating from CRISIL

10 Feb 2022 , 09:46 AM

Real estate developer Macrotech Developers Limited (Lodha) has received ‘A/ Stable’ rating from CRISIL Ratings (S&P Global company). The rating reflects the exceptionally strong improvement in the Company’s balance sheet over the last nine months as well as the growth it has been able to achieve in the same period.

This rating is a 2 notch upgrade from Lodha’s previous rating — ‘BBB+/ Positive’ by India Ratings (also rated ‘A-/ Stable’ by Brickworks). The ‘A/Stable’ rating given by CRISIL not only reflects the Company’s strong brand positioning in the MMR and Pune markets where it operates but also the strength in its balance sheet and financial flexibility that it possesses.

At around 9.50 am, Lodha was trading at Rs1308.00 per share up Rs8.65 or 0.67%.

Lodha has consistently shown strong operating cash flows in each of the quarters in FY22. Coupled with two landmark equity raises through an IPO and QIP, this has resulted in an unprecedented reduction in its net debt by more than Rs6,200cr.

Abhishek Lodha, MD & CEO, Macrotech Developers Ltd. said, “We are pleased that Lodha has achieved ‘A’ rating from CRISIL which is considered the gold standard of the ratings. This establishes Lodha’s credentials of making significant progress towards having a resilient balance sheet. Company’s ability to bring down its debt in parallel with significant amount of investment into growth is truly a testimony of its brand strength and the consumer’s trust that it enjoys.

In a short period of nine months, Lodha has not only achieved its guidance of reducing net debt to below Rs10,000cr with a quarter to spare, it has also been able to tie-up 11 JDA projects totaling for ~8.8 million square feet with GDV potential of ~Rs14,600cr. This gives us pathway of future growth in a very low leverage working paradigm thus de-risking the business to a large extent from the usual business cyclicality.”

With this ratings upgrade, the company will continue to focus on reducing its debt levels as well as its cost of debt. The company remains committed to continue its journey of de-leveraging as well as capital light expansion strategy. This will enable the company to achieve the twin objective of becoming a very low leverage company along with a significant growth runway ahead.