September 14, 2025

India’s real estate scene is buzzing with some cool profits but also facing tight cash flows in FY25, says a deep report by Nuvama Institutional Equities. Let’s unpack this masaledar mix! The study covered 23 big developers and found that overall, cash EBITDA margins reached a spicy 42%, up from 40% in FY24. That means developers made more cash profit from their usual business—up 16% compared to last year. But wait, there’s a twist! While profits brightened, cash flows started to feel the heat. The secret culprit: working capital. With home sales slowing a bit and unsold homes piling up—a classic phase in the housing cycle—developers had to lock more money in day-to-day operations. Only 9 developers freed up working capital in FY25, down from 12 the previous year. Nuvama notes, “Consequently, operating cash flow faltered a bit in FY25.” Not all builders are the same in this game. Top stars like DLF, Lodha, and Rustomjee scored high on cash margins. On the flip side, Puravankara, Sobha, and Brigade lagged behind. When it comes to free cash flow (the real money left after big spending), DLF topped the charts, followed by Shriram Properties and Kolte-Patil. But some big names like Prestige Estates, Puravankara, and Godrej Properties saw negative free cash flow, mainly because they spent heavily on land and annuity projects. At the industry level, free cash flow took a hit—only 4 out of 23 companies generated positive FCF this year, compared to 8 last year. Good news? Signature Global, Kolte-Patil, and DLF improved their cash flow. But Sobha, Lodha, and Prestige saw it drop. How do these developers manage their money? Oberoi Realty and Sunteck Realty mainly rely on operating profits for cash. But Godrej Properties and Aditya Birla Real Estate leaned more on outside funding to keep things moving. Despite low borrowing, 11 firms raised fresh equity in FY25. Nuvama says this shows many builders want to avoid debt risks. Looking ahead, the brokerage expects profits to hold steady but warns that rising construction and slower home buying could push working capital needs higher. They add, “We believe the increase in house prices will moderate, capping margin improvement. Given land capex is likely to remain high, this should keep cash flow generation in check.” Not all builders look the same in this maze—Nuvama kept their ‘BUY’ ratings on Prestige Estates and Brigade, calling them their favourite picks in the sector. So, the real estate story for FY25 is a spicy cocktail of rising profits mixed with cash flow challenges. Builders and buyers alike will want to watch closely as the market swings into its next act!

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Tags: Indian real estate, Profitability fy25, Cash flows, Working capital, Free cash flow, Nuvama analysis,