Moody's downgrades Lodha Developer's rating on weak sales1 min read . Updated: 28 Jan 2019, 08:44 PM IST
- The agency affirmed its rating on the city based builder at B2, but downgraded its outlook to "stable" from the "positive" earlier
- Moody's expects Lodha's operating sales in fiscal year 2018-19 to be 25% lower than what it had achieved in the previous 12 months
MUMBAI : Expectations of a dip in sales Monday led global ratings agency Moody's Investors Service to downgrade its outlook on India's largest realty player Lodha Developers.
The agency affirmed its rating on the city based builder at B2, but downgraded its outlook to "stable" from the "positive" earlier.
"The change in outlook reflects the company's weaker-than-expected operating sales during the six months to September 2018 and high debt maturities in fiscal years ending March 2020 and March 2021," Saranga Ranasinghe, Moody's assistant vice president and analyst, said.
The agency said it expects Lodha's operating sales in fiscal year 2018-19 to be 25% lower than what it had achieved in the previous 12 months, and 38% lower than what it had expected.
The sales have been lower in both the markets Lodha operates in -- Mumbai and London --- and will only continue, it said.
In the first six months of the fiscal year till September, Lodha achieved sales of ₹3,460 crore from India operations and ₹420 crore from its London operations, it said, stressing these numbers are lower by 27% and 70%, respectively, than Moody's expectations on an annualised basis.
However, given that the company's inventory is in the ready to move stage preferred by customers, the ratings agency said the cash collections will be in line with the expectations and around 20% higher than FY18.
The other factor weakening Lodha's profile is the large debt maturities over the next 12-18 months, which are "significantly higher than the company's cash balance and expected cash flow from operations," the agency said.
Lodha has ₹1,300 crore of debt coming up for refinance in the next 12 months, a GBP 290 million loan maturing in August 2019, USD 325 million in bonds maturing in March 2020 and another GBP 517 million loan maturing in March 2021, it said.
This story has been published from a wire agency feed without modifications to the text.