CRISIL said that the rating action reflects improvement in the company's financial risk profile driven by continued focus on deleveraging while maintaining strong operating performance.

Gross debt reduced substantially to Rs 9,050 crore as on 31 March 2023 against Rs 11,540 crore as on 31 March 2022, and is expected to further reduce to Rs 8,000 crore by March 2024.

The company continues with its plan regarding reduction of debt level with net debt level-to-equity ratio expected at 0.5 time or net debt-to-operating cash flow expected at 1 time, whichever is lower, by March 2024.

The operating performance also witnessed healthy improvement with company recording sales of 94 lakh square feet (sq. ft) for fiscal 2023 valued at Rs 12,060 crore, an improvement of 17.5% and 33.6% respectively, over fiscal 2022.

Healthy sale trajectory coupled with timely construction progress resulted in collection of Rs 9,710 crore and cash flow generated from operations of Rs 5,110 crore (excluding cash inflows of UK business) for fiscal 2023.

This is expected to remain strong going forward as well, supported by healthy launch pipeline, strong operating margin in ongoing projects and good proportion of ready-to-move inventory (RTMI).

The ratings continue to reflect MDL's established brand and strong market position in the real estate segment in Mumbai Metropolitan Region (MMR) and comfortable cash flow position and financial flexibility.

These strengths are partially offset by adequate though improving financial risk profile because of historical debt-funded land acquisitions and susceptibility to cyclicality and regulatory risks in the real estate sector.

Macrotech Developers is one of the largest real estate developers in India. Established since 1980s, it has developed properties over 95 msf mostly in MMR market. It has sold more than Rs 62,400 crores in eight years through fiscal 2023.

For the quarter ended 30 June 2023, profit after tax (PAT) was Rs 179.2 crore on operating income of Rs 1617.4 crore, against Rs 271.3 crore and Rs 2675.8 crore, respectively, for the corresponding period of the previous fiscal.

The scrip slipped 0.61% to currently trade at Rs 789.45 on the BSE.