Mumbai’s tightening water restrictions are beginning to weigh on the real estate sector, with developers such as Marathon Nextgen Realty and Prestige Estates facing potential execution and cost pressures as the Brihanmumbai Municipal Corporation (BMC) clamps down on supply amid a delayed monsoon.
The civic body has imposed a 20 per cent cut in water supply to industrial and commercial establishments and temporarily suspended water supply to construction sites. It has also halted approvals for new water connections for construction projects. These curbs, effective June 17, come on top of an earlier 10 per cent citywide water reduction enforced from May 15. The restrictions are already being seen as a challenge for project timelines and operational costs, especially for Mumbai-focused developers.
Created with AI. Errors are possibleFor Marathon Nextgen Realty, which has a significant mix of residential and commercial developments, the suspension of water supply to construction sites could slow progress across ongoing projects.
The company has a sizeable pipeline, with ongoing developments accounting for 59 per cent of its affordable housing portfolio and 33 per cent of its premium and luxury housing segment. Any disruption at construction sites may impact execution timelines, particularly in phases that require continuous water usage.
The broader impact could also be felt on costs, as developers turn to private water tankers to keep work moving. This is especially relevant for Marathon, given its active project base and expansion across segments including affordable and mid-sized residential developments, which together form more than half of its sales mix.
The company reported a record profit after tax of Rs 206 crore in FY26 and achieved a net cash-positive position after repaying debt for the first time in its history.
However, revenue has been under pressure, declining from Rs 717 crore in FY23 to Rs 496 crore in FY26, while margins have narrowed from 34.3 per cent to 24.4 per cent over the same period. EBITDA has also seen a steady decline.
With collections of Rs 1,048 crore in FY26 and booking value of Rs 832 crore, the company has maintained stable cash flows, but execution delays could push revenue recognition further out.
The company recently entered the Mumbai market in a big way through a joint venture with ABIL Group for a redevelopment project in Versova, with an estimated gross development value exceeding Rs 9,000 crore. The project spans a 6-acre parcel with a development potential of about 1.7 million square feet.
It also has a pipeline of upcoming residential projects in Mumbai, including developments in Mulund and other locations, adding to execution exposure in the city.
Given the suspension of water supply to construction sites, these projects could face delays, particularly in early-stage development. Any slowdown may have implications for timelines and revenue recognition, especially since Prestige has a large unrecognised revenue base of Rs 14,525 crore tied to Mumbai projects.
The company, however, continues to report strong operating performance. In FY26, Prestige posted revenue of Rs 12,685 crore and profit of Rs 3,692 crore, supported by robust pre-sales of Rs 30,025 crore, above its guidance range of Rs 25,000–27,000 crore. Collections also rose sharply to Rs 18,515 crore.
Its diversified geographic presence, with strong contributions from Bengaluru and NCR alongside Mumbai, may provide some cushion against localized disruptions.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
