21 Indian developers crossed Rs 1 trillion in industry collections
India's residential real estate sector is moving into the middle cycle of its current phase, characterized by stronger balance sheets and a shift toward capital deployment rather than debt reduction.
Indian residential real estate developers are transitioning from balancing their balance sheets to executing projects and deploying capital. A report by Nuvama Research indicates that the sector has passed its initial recovery phase. Developers now possess lower leverage, significant liquidity, and stronger equity funding compared to recent years. The focus is shifting toward generating returns on new investments rather than securing easy gains from deleveraging.
Analysis of cash flows for 21 real estate developers reveals that operating cash generation has remained steady despite concerns about moderating sales volumes. Industry collections reached Rs 1 trillion, and operating cash profits expanded. However, cash EBITDA margins declined to 39% in fiscal year 26 from 42% in fiscal year 25.
Nuvama stated that while the fundamentals of the sector remain resilient, the housing cycle itself has entered its middle stage. Developers are increasingly expected to increase spending on land acquisition and assets that generate annuity income. The report attributes margin declines to specific factors but notes that the overall financial position of major players has improved significantly.
