| Kolte-Patil Developers Limited | ||||||
| Ratings Reaffirmed | ||||||
| Rating Action | ||||||
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| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale CRISIL Ratings has reaffirmed its ratings on the bank facilities of Kolte-Patil Developers Limited (KPDL; flagship company of the KPDL group) at ‘CRISIL A+/Stable/CRISIL A1’.
Sales were impacted in first quarter of fiscal 2022 due to 2nd wave of Covid-19, however, has since picked up from second quarter. Sales volume and collections in Q3 FY22 have grown by 28% and 13% q-o-q indicating recovery since 2nd wave of Covid-19. Company sold 19.3 lakh unit sq ft in 9M FY2022 against 12.1 lakh sq ft in 9M FY2021, sales value has increased by 31% q-o-q and overall sales in 9M FY22 has reached Rs 1238 crore, higher than sales value of Rs 1201 crore for full year fiscal 2021. Overall sales, which was impacted in fiscal 2021, should recover to pre-Covid levels in fiscal 2022.
Though operations were disrupted and sales slowed down in the first half of fiscal 2021 because of the lockdown imposed by the central government to contain the spread of Covid-19, the company achieved more than 65% of sales and 72% of collections in the second half, indicating significant recovery post lockdown. It sold 20.8 Lakh sq ft and collected Rs 1,128 crore in fiscal 2021, as against 250 Lakh sq ft and Rs 1,368 crore, respectively, in fiscal 2020.
The ratings continue to reflect the KPDL group’s strong brand and market position, which will continue to support sales and collections, and comfortable financial risk profile. These strengths are partially offset by 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.
CRISIL Ratings has considered debentures of Rs 101 crore (as on December 31, 2021) as neither debt nor equity as the debentures do not have any fixed monetary obligation or interest.
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 strong saleability as well as collections in the ongoing and proposed projects. External borrowing was used to fund 17% (outstanding debt to total assets) of project cost. Financial flexibility is supplemented by strong refinancing ability: the KPDL group has unsold inventory of Rs 1850 crore and fully paid-up land bank with development potential of 158 lakh sq ft against which additional debt can be contracted, if required. Furthermore, undrawn bank lines stood at Rs 127 crore and cash and equivalent at Rs 167 crore as on March 31, 2021. |
Outlook: Stable CRISIL Ratings believes the KPDL group will continue to benefit over the medium term from its strong brand and established position. The financial risk profile will be comfortable, driven by low reliance on external debt. |
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 around 200 lakh sq ft of projects, and currently has 22 ongoing projects comprising 25.1 lakh sq ft. The projects are undertaken under KPDL or separate special purpose vehicles, with KPDL being the majority shareholder in the projects. |
Key Financial Indicators
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Any other information: Not applicable |
| Note on complexity levels of the rated instrument: CRISIL Ratings' complexity levels are assigned to various types of financial instruments. The CRISIL Ratings' complexity levels are available on www.crisil.com/complexity-levels. Users are advised to refer to the CRISIL Ratings' complexity levels for instruments that they consider for investment. Users may also call the Customer Service Helpdesk with queries on specific instruments. |
Annexure - Details of Instrument(s)
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Annexure - List of Entities Consolidated*
*Details as on March 31, 2021 |
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | |||||||||||||||||||||||||||||||||
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Criteria Details
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