India Ratings upgrades Sunteck Realty to ‘IND AA’, outlook stable
India Ratings and Research (Ind-Ra) has upgraded realty developer Sunteck Realty’s Long-term Issuer Rating to ‘IND AA’ from ‘IND AA-’. The Outlook is Stable.
The ratings factor in the strong operational performance that the developer has displayed since 2020-21, and consequent improvement in the scale of operations.
Post 2020-21, Sunteck Realty has launched four projects including two projects in 2023-24 with an agency-estimated gross development value of around Rs 3,500 crore and has already sold about 55% of the total area from these projects.
The rating also notes the low execution risk of these projects. At the end of December quarter, the committed receivables from sold area in the completed and ongoing projects amounted to 2.4x-2.5x of the balance cost of the ongoing projects.
“The upgrade reflects Ind-Ra’s expectation that Sunteck Realty would have continued to witness significant improvement in its consolidated operational performance in FY24 and that the improvement would be sustained over the next 12-24 months, led by a sizeable increase in its scale and project diversification as it launches new projects while maintaining its leverage and prudent financial practices,” India Ratings said.
The ratings are also supported by strong liquidity available with the company. Two of the projects are near completion and accounted for about 30% of the overall committed receivables from sold area, at the end of December quarter.
Given the low debt levels, the repayment and interest expenses are significantly
