Real Estate & Construction sector plays an important role in the development of a country’s base. Understanding its performance would be crucial as, in India, it is one of the largest contributors to the Gross Domestic Product (GDP) and one of the largest generators of economic activity. Real estate & construction sector in general, is perceived to be financially more risky compared to other sectors of the economy. The current research extends and adds to the extant literature by investigating the financial health of Real Estate & construction firms in India.

Financial ratio analysis which is one of the most widely used tools for financial performance evaluation is used for this study. The following major categories of ratios have been used for the analysis-Efficiency, Profitability, Solvency and Liquidity. The time period for the study is 2009-2014.

Publicly listed Indian real estate & construction companies which are engaged in the development of retail, commercial, residential and civil services are examined. A sample of 20 real estate & construction companies listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) was selected for this empirical research. All of the selected sample Indian real estate & construction firms have a market capitalization of more than Rs. 100 crores. The research study relies on secondary data based on firms’ annual reports and financial statements.

The research provides important insights into the financial performance of real estate & construction firms in India and the findings are encouraging for the growing real estate & construction sector. The findings will be useful for investors and government policy makers.