Moody’s Downgrades Lodha Developers
Rating agency Moody’s Investors Service has downgraded the corporate family rating of Lodha Developers Pvt Ltd (LDPL) to B2 from B1. Moody’s has also downgraded the senior unsecured debt rating of the US dollar denominated bonds issued by Lodha Developers International Ltd and guaranteed by LDPL to B2 from B1.
“The downgrade reflects our expectation that the operating environment for the Indian real estate sector will continue to remain weak post the demonetization exercise that took place in November 2016. Weak operating conditions will continue to pressure LDPL’s sales performance over the next 12-18 months,” said Saranga Ranasinghe, a Moody’s Assistant Vice President and Analyst, adding, “As a result, LDPL’s financial profile will no longer be consistent with the previous B1 corporate family rating ..
Sales volumes in the Indian residential market decreased by more than 40% in fourth quarter of 2016 compared to the same period in 2015, Moody’s said in its rating statement. It expects Lodha Developers’ operating sales to be 15-20% lower than Moody’s previous expectations of around Rs 7,000 crore for the financial year ending March 2017.
Reductions in home loan interest rates or any possible measures from the Union Budget on 1st February 2017 will not lead to any near-term material improvement at the high-end of the real estate market, as any such measures are more likely to be aimed at mid and low income earners, Moody’s added.