.jpg)
Continuing premiumization, favorable affordability along with rising per capita incomes should help large, listed residential developers build 10-12% volume growth this fiscal after an estimated growth of ~14% on a high base in fiscal 2024.
These developers have a relatively good record of timely and quality delivery, which explains the greater consumer preference for them. Accordingly, their market share is seen doubling to 30-32% in fiscal 2025 (chart 1 in annexure), compared with fiscal 2019 before the onset of the Covid-19 pandemic.
Higher collections and sharper focus on asset-light models have enabled deleveraging of balance sheets, which, in turn, supports the credit profiles of developers. A CRISIL Ratings study of 11 large and listed residential developers, accounting for one third of the residential property sales in the country, indicates as much.
Gautam Shahi, Director, CRISIL Ratings, “With robust double-digit demand growth over the past three fiscals, there has been steady inventory liquidation in the top seven3 cities to ~2.4 years in fiscal 2024 from ~2.8 years in fiscal 2023 and ~four years before the pandemic. Despite a healthy launch pipeline, in line with incremental demand, we expect inventory to remain comfortable at 2.1-2.3 years this fiscal.
The product mix continues to shift towards the mid-to-premium and luxury segment, with launches in the affordable segment expected to remain muted. The share of launches in the mid-to-premium and luxury segment is estimated at 55-60% for fiscal 2024 compared with 30-35% before the pandemic.
The momentum in demand and robust collections will help developers fund new launches and withstand any downcycles without stressing their credit profiles. Developer’s ability to maintain leverage amid more launches will bear watching.
