It added that the credit ratings agency has maintained the previous short term rating of [ICRA] A2. The ratings so assigned are for the bank facilities of Puravankara worth Rs 3000 crore.

Offering the ratings rationale, ICRA said that the revision in the rating outlook takes into account the healthy progress in the sale of ready to move-in (RTM) inventory and the consequent improvement in operating surplus to Rs 505 crore in 9mFY2020 from Rs 281 crore in FY2019.

In the nine-month period ending December-2019; the company has achieved sales of 1.2 million square feet (mn sqft) in the RTM segment, which is around 54% of the total sales during the period.

The group reported sales of 2.2 mn sqft from all segments, with majority of the sales generated from RTM and ongoing projects and without the contribution of sales from projects launched towards the end of Q3FY2020.

Reduced land investments during the period resulted in reduction in the net debt to Rs 2,590 crore as on December 2019 from Rs 2,743 crore as on March 2019.

The rating also draws comfort from the track record of Puravankara (PL) in the residential real estate market, and the steady market share being gained by it in both existing and new markets.

The ratings also take into account the leverage level of the company, on account of the unsold RTM inventory of 1.4 mn sqft, investments in land bank and the initial stage of several projects in the company's portfolio.

The positive outlook on the long-term rating of [ICRA]BBB+ reflects ICRA's opinion that the company will continue to benefit from the healthy sales progress in both the completed RTM inventory and ongoing projects, as well as the planned launch of new projects.

Puravankara has presence in both premium and affordable housing segments and has already developed projects with cumulative saleable area of 35.7 mn sqft over the last four decades.

Shares of the real estate company ended 1.37% higher at Rs 33.40 on Friday.