The cash flow position of the company is severely impacted due to delays in collections of sizeable sold inventory as well as weak sales velocity in ongoing and completed projects.
As on June 30, 2019, PLL sold 70% of the total launched area of 49.73 lakh sq. ft. for a total sale value of Rs. 4,394 crore. However, out of this, sizeable quantum of collections of Rs 1,685 crore were pending.
Owing to weak demand in the real estate industry, the sales in many of the projects remained muted. Additionally, occupancy certificate is delayed in one of the large projects of the company and receivables of Rs. 245 crore are stuck for a long time.
The rating is also constrained by exposure to project execution risk for overall project portfolio considering significant area under development. It has weak financial risk profile characterised by considerable losses and deterioration in gearing levels.