Puravankara reports 16% revenue growth in 9MFY25 amid expansion and sales surge

Puravankara Limited has reported a 16% increase in total revenue growth, reaching ₹1,529 crores in the first nine months of FY25, reflecting strong operational momentum. The company’s sales volume increase saw 4.24 million square feet (msft) sold, generating a total sales value of ₹3,724 crores. Additionally, operating cash inflows rose by 14% year-on-year (Y-o-Y) to ₹3,209 crores, underscoring the company’s growing financial strength.

Despite this upward trajectory, Puravankara faced challenges related to revenue recognition under Ind AS 115, which led to a reported net loss of ₹99 crores for the period. However, under the Percentage of Completion (PoC) method, profitability remains intact, indicating that the current financial structure supports long-term gains. The delay in occupancy certificate (OC) approvals for four major projects has deferred revenue recognition to Q4FY25 and Q1FY26, impacting short-term earnings.

What Is Driving Puravankara’s Sales Volume Increase?

Puravankara has demonstrated significant growth through aggressive expansion in western India, with the acquisition of four marquee projects in Lokhandwala, Pali Hill, Breach Candy, and Thane. These acquisitions have added over ₹9,000 crores in Gross Development Value (GDV), positioning the company for substantial future revenue gains.

The company’s customer collections increased by 19% Y-o-Y to ₹2,991 crores, reflecting strong buyer confidence and improved cash flows. During Q3FY25, customer collections rose 6% Y-o-Y to ₹993 crores, while average price realisation surged by 16%, with Purva projects seeing a 29% hike and Provident projects witnessing a 7% increase. These figures highlight the company’s ability to drive sustained sales growth across its property portfolio.

The company also made a ₹1,236-crore investment in land purchases, adding over 7 msft of saleable area, which is projected to yield a GDV of ₹12,000+ crores in the coming years. This strategic move aligns with Puravankara’s objective to expand its landbank to 45 million square feet, ensuring a steady pipeline of new project launches.

How Do Cash Flows and Debt Levels Impact Future Growth?

Puravankara’s operating cash inflows remained strong, generating an excess of ₹752 crores in 9MFY25. As of December 31, 2024, outstanding collections from sold units stood at ₹4,588 crores, with a total estimated surplus from ongoing and completed projects reaching ₹6,808 crores.

However, the company’s net debt increased to ₹2,824 crores, resulting in a net debt-to-equity ratio of 1.58 for Q3FY25. The weighted average cost of debt was recorded at 11.73%, reflecting the impact of capital investments in land acquisition and project expansion. While these expenditures have affected short-term earnings, they are expected to contribute significantly to long-term revenue growth and profitability.

What Are the Key Market Trends Impacting Puravankara’s Strategy?

India’s real estate sector has remained robust, with 71 msft of office leasing activity recorded in CY24, underscoring continued demand for commercial and residential properties. Recent policy changes announced in the Union Budget, including income tax slab rationalisation, increased rental TDS thresholds, and the Reserve Bank of India’s (RBI) repo rate adjustments, are expected to boost disposable income and drive demand in the affordable and mid-segment housing categories.

Puravankara’s Managing Director, Ashish Puravankara, stated that the company is well-positioned to leverage these market trends, supported by its strong sales volume increase, strategic land acquisitions, and expansion into high-value real estate markets. Over the past three years, the company has achieved an impressive 57% compound annual growth rate (CAGR) in sales, reflecting its ability to navigate market shifts effectively.

How Does Ind AS 115 Affect Revenue Recognition?

Puravankara transitioned to Indian Accounting Standards (Ind AS) 115, moving from the Percentage of Completion (PoC) method to the completed contract method for revenue recognition. Under this framework, revenue is recognised only upon project completion and handover of flats, leading to short-term financial fluctuations.

This transition has impacted the company’s reported earnings, as revenue from projects that are still under development is not immediately recognised, despite strong operating cash inflows and a robust sales pipeline. However, as more projects reach completion, revenue recognition is expected to increase, supporting profitability in future quarters.

What Is Puravankara’s Growth Outlook for 2025 and Beyond?

Puravankara remains focused on expanding its project portfolio, with 7+ msft of new developments set to launch over the next 15 months. This aligns with its long-term vision of increasing market share and sustaining total revenue growth in the highly competitive real estate sector.

The company’s ability to balance sales volume increase, operating cash inflows, and debt management will be critical in determining its financial performance moving forward. With continued demand in India’s housing market and strategic investments in high-value land acquisitions, Puravankara is poised for sustained expansion and improved revenue realisation.

Puravankara’s financial performance in 9MFY25 reflects strong growth in total revenue, robust sales figures, and substantial operating cash inflows, despite short-term losses attributed to Ind AS 115 revenue recognition policies. The company’s expansion into high-value markets, record-high land acquisitions, and increasing buyer confidence indicate a promising outlook. While its net debt position has risen due to strategic investments, its long-term profitability remains intact, supported by its ability to drive sales and maintain strong operating cash flows.

As Puravankara prepares to launch new projects valued at ₹12,000+ crores, its position in India’s real estate sector continues to strengthen, making it a key player in the industry’s evolving landscape.