While in the long run all can go well, it’s the near-to-medium-term cash flows that will make developers grow/survive. Trends show sales slowing already (since April 2016) with the November 8 event likely to impact volumes in the near term. In the listed space, we see debt increasing for certain developers, but not many needing equity for survival. We revise our numbers to match debt, lower sales and its effects on collections and servicing of liabilities. Trade remains valuation mismatch and pre-sales growth numbers.
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Cash flow from operations remains positive for all until now, excluding DLF, HDIL and Puravankara. Organized developers from Mumbai recorded steady sales until recently; but the market has slowed after growing for two years on volumes. In Bangalore too, local issues drove negative sentiment, but organized developers held on to their volumes. Gurgaon remains an aberration for large developers as well—sales remain weak. We expect launches to drop further as developers look to sell from ongoing projects.