The credit rating agency, Moody's Investors Service believes the recent reduction of Goods and Services Tax (GST) on real estate is credit positive for India's property developers including Lodha Developers.

Moody's feel that the reduction in tax will boost demand and increase sales of properties under construction, "The reduction in GST on affordable housing to one percent is in line with the government’s increased focus on the affordable housing segment."

Mumbai-based real estate firm Lodha Developers' affordable housing projects have contributed around 44 percent of its total sales in the fiscal year ending March 31, 2018.

Furthermore, the report says that the magnitude of the credit positive effect for property developers from the GST changes is yet to be seen. Also, the new GST measures will eliminate the ability to claim the input tax credit, which may hit the profitability of developers including Lodha Developers.

Moody's further added, "The developers may have the option to mitigate this loss by increasing prices slightly but given the weak market conditions that have been present in the Indian real estate market, there is a large ready-to-move inventory, which is usually preferred by customers. This inventory does not attract GST."