India Ratings and Research (Ind-Ra) has affirmed AA-minus on luxury real estate developer Sunteck Realty's long-term issuer rating with outlook upgraded to positive.
At the same time, the short term issuer rating has been affirmed A1-plus. The upgrade in outlook reflects Ind-Ra's expectation of an improvement in business profile of Sunteck due to acceleration in the already-consolidating residential real estate market with the pandemic-related disruptions having constrained demand and supply from unorgsed developers.
The outlook upgrade is also supported by resilient operating performance of Mumbai-based company despite the pandemic. The price point diversity across completed, ongoing and new project launches, prudent financial policies, strong credit metrics and cashflow visibility also provided conviction to the outlook upgrade.
Chairman and Managing Director Kamal Khetan said the affirmation is a reflection of the company's continued focus on prudent cash flow management along with financial discipline.
"Strong operating cash flows has aided us in the further reduction of our already negligible debt. We intend to maintain this discipline going forward and focus on financial flexibility to grow our business. Our ongoing focus on execution driven by our strong in-house construction capabilities will continue to generate sustained cash flows for us."
Khetan said the availability of inventory across Suntech brands and pricing spectrum creates flexibility to offer projects based on needs of various customer segments.
"With a strong uptick on sales front across our portfolio of projects, especially in the mid-income and aspirational segments, we remain confident of emerging as one of the biggest beneficiaries of the ongoing consolidation in industry basis our balance sheet strength, established track record and operational cash flow visibility."
( With inputs from ANI )
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