Page 64 - Kolte Patil AR 2019-20

Risk management

Economy risk The Company’s Mitigation India’s economy slowed
performance could be down to 4.2% in FY20, yet
adversely affected in the Company reported an
the event of economic increase in Revenue, PAT
slowdown. and collections.

Labour risk Any decline in the Mitigation Over the years, the
availability or shortage Company has promised
of construction labourers career growth, attractive
could affect project progress remuneration and a healthy
and cash flows. work environment..
Geographic risk Concentration in a few Mitigation The Company selected to
regions could impact the focus on the development
Company’s growth. of residential real estate
properties in Pune, Mumbai
and Bengaluru. In Pune,
the Company enjoyed
a dominant position; in
Mumbai, the Company
reported the fastest
growth in the society
redevelopment niche.
Raw material risk Raw materials such as Mitigation The Company has agreed
cement, bricks, sand, upon a standard price with
among others, constitutes its vendors for all major
a major chunk of the cost in materials. The Company’s
the construction industry contracts are non-
and fluctuations in prices speculative in terms of raw
of these may lead to material.
substantial losses, which
in turn may impact the
topline.
Funding risk The Company may not Mitigation The Company optimised
be able to fund its capex its debt-equity ratio to
requirements in a cost- 0.35 during FY20 from 0.47
effective manner. during FY19. The Company
was accredited with A+/
Stable rating by CRISIL, one
of the highest among Indian
residential real estate
players.
Competition risk Intense competition from Mitigation The Company’s core
peers could affect the strength lies in robust
Company’s market share. project planning and
execution, enhanced by
strong procurement and
people management,
making it a preferred choice
of every customer.

62 | Kolte-Patil Developers Limited