Debt to rise for road developers, amid strong revenue growth
ECONOMY & POLICY

Debt to rise for road developers, amid strong revenue growth

Sizeable equity commitments in under-construction projects and rising working capital requirements will increase the debt burden of road developers, though revenue growth will also be high in the next two fiscals driven by strong awarding and execution, together with significant budgetary allocation...

Sizeable equity commitments in under-construction projects and rising working capital requirements will increase the debt burden of road developers, though revenue growth will also be high in the next two fiscals driven by strong awarding and execution, together with significant budgetary allocation to the sector. All the same, with the leverage level low at present, developers have headroom to borrow, which would keep their credit risk profiles stable. Asset monetisation will be crucial to rein in debt at comfortable levels. A CRISIL Rating analysis of 18 EPC players, constituting 70 per cent of the sector revenue, indicates as much. Says Mohit Makhija, Senior Director, CRISIL Ratings, “Total equity commitment towards under-construction PPP projects is estimated at over Rs 210 billion by fiscal 2025. Further, the working capital requirements are expected to increase with expected strong revenue growth of 10-15 per cent over the next two fiscals and rollback of liquidity support provisions under the Atmanirbhar Bharat package. Accruals will fund ~45 per cent of these incremental outflows, while the balance is expected to be funded through asset monetisation and debt. Consequently, the debt of the sample set is expected to inch up to Rs 300 billion as of March 2025 from Rs 170 billion as of March 2022.”

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Real Estate

Della, Hiranandani & Krisala unveil Rs 11 billion themed township in Pune

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Hansgrohe unveils LavaPura Element S e-toilets in India

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Infrastructure Urban

HCC Net Profit Stands at Rs 2.28 Billion for Q4 FY25

Hindustan Construction Company (HCC) reported a standalone net profit of Rs 2.28 billion in Q4 FY25, a sharp increase from Rs 388 million in Q4 FY24. Standalone revenue for the quarter stood at Rs 13.30 billion, compared to Rs 14.28 billion in Q4 FY24. For the full fiscal year, the company reported a standalone net profit of Rs 849 million, down from Rs 1.79 billion in FY24. Standalone revenue for FY25 was Rs 48.01 billion, compared to Rs 50.43 billion in the previous year.Consolidated revenue for Q4 FY25 stood at Rs 13.74 billion, and for FY25 at Rs 56.03 billion, down from Rs 17.73 billion i..

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