Rationale

 The rating reaffirmation for Ajay Enterprises Private Limited (AEPL) factors in the expected growth in sales and collections for its residential projects in FY2026, along with healthy occupancy of its commercial asset, Vishal Cinemas, while maintaining a comfortable leverage. The company’s collections are estimated to grow by about 7%-10% in FY2026, supported by good sales velocity in its newly launched Phase 3 of the Eros Sampoornam project and adequate construction progress for its ongoing and recently launched projects. AEPL’s total external debt declined to Rs. 45.4 crore as of March 2025 (PY: Rs. 100.1 crore) and is likely to remain low as of March 2026 supporting in comfortable leverage of 0.4-0.6 times as of March 2026 (PY: 0.3-0.5 times). Its cash flow adequacy ratio1 for the ongoing residential projects remained comfortable at 61% as of August 2025. AEPL’s commercial asset Vishal Cinemas started operations in March 2023 and is fully leased as on date. The rentals are around Rs. 23.3 crore in FY2025 and is expected to be in similar range for FY2026. The ratings factor in the long and established track record in real estate development with demonstrated project execution capabilities, the strength derived by the company being a part of Eros Group and the extensive experience of its promoters in the real estate industry in the National Capital Region (NCR). The ratings note the demonstrated track record of financial support from the promoters through infusion of unsecured loans when needed and fully paid-up unencumbered land bank in the Delhi and Haryana region. The ratings are, however, constrained by the company’s modest scale of operations, along with its exposure to execution and market risks associated with the ongoing projects, with majority of the total cost yet to be incurred in Eros Sampoornam, Phase 3 as of August 2025, along with 16% of inventory yet to be sold in its ongoing projects. Further, AEPL has a considerable unsold inventory in its completed projects of 4.56 lsf across commercial, residential and plots exposing the company to market risk. AEPL is further exposed to geographical concentration risk, as the ongoing projects and land bank are mostly located in the Delhi NCR region, increasing the dependence on a single micromarket for sales and revenue. Moreover, being a cyclical industry, the real estate business is highly dependent on macro-economic factors, which exposes its sales to any downturn in demand and competition within the region from various other developers. The Stable outlook reflects ICRA’s expectation that the company will benefit from the adequate sales and collections from its ongoing projects as well as new launches, while maintaining low debt levels and comfortable leverage.