DLF Ltd, India’s
largest developer by market value, posted a 39% decline in net profit for the
three months ended 31 March from a year earlier because of increased costs.
Net profit fell to
Rs.211.7 crore in the fiscal fourth quarter, from Rs.344.54 crore in the
year-ago period, the company said in a filing to the stock exchanges on
Wednesday. Revenue fell marginally (2.47%) to Rs.2,616.78 crore from
DLF’s profit fell
below expectations of Rs.273 crore based on the median of 17 analysts’
estimates compiled by Bloomberg. Higher costs, including interest expenses, the
price of land and development rights, dented profit at the company, which had
debt of more than Rs.22,000 crore as of 31 December. In the quarter gone by,
the company spent Rs.603.89 crore on interest payments.
Shares of DLF
dropped 2.53% to close at Rs.183.35 on BSE on a day the benchmark Sensex lost
0.77% to close at 16,312.15 points.
reported earnings after market hours.
analyst, who didn’t want to be named, said that while debt reduction had
happened to an extent, timely delivery of projects is going to be a key factor
in the coming quarters without which cash flows will not come in.
“In northern India,
particularly, even though most developers have low-cost land banks, profitability
has been squeezed and most projects are delayed by 2-3 years or so,” he said.
Real estate firms
had been expected to perform marginally better in the March quarter as they
improved execution of projects and sales bookings. But concerns remain over debt
and cash flows. Developers also struggled to improve quarterly sales and profit
in 2011-12 as the economy slowed, though most were able to launch more projects
even as cash flows remained a worry.
Parsvnath Developers Ltd reported a Rs.23 crore loss in the quarter ended 31
March because of higher costs, interest expenses, and raw material prices. That
compared with a Rs.32 crore profit in the year-earlier period. Its revenue
during the period dropped 8% to Rs.219 crore.
Parsvnath said it
hadn’t been able to reduce its debt during the March quarter from Rs.1,200
crore in the October-December quarter.
Jain said 2011-12 had been challenging because of rising costs and a funding
“This has affected
our business adversely both in terms of top-line and the bottom-line of our
results. We have also been affected adversely by the rollback of income tax
exemption by the central government on affordable housing projects,” he said.
Delhi-based developer, Omaxe Ltd, reported a 103% increase in its consolidated
net profit to Rs.23.73 crore for the quarter ended 31 March from Rs.11.67 crore
a year ago. Its net sales increased by 6.15% to Rs.603.58 crore from Rs.568.6
crore in the year-ago period.
Rohtas Goel, chairman
and managing director of Omaxe, said demand in smaller cities such as Ludhiana,
Indore and Lucknow had helped push sales. The company will explore new
locations and expand existing projects to meet demand, he said.
estate firm Housing Development and Infrastructure Ltd (HDIL) said net profit
for the March-ended quarter rose 71.14% from a year ago to Rs.315.2 crore, and
revenue rose 13.13% to Rs.625.1 crore. Over the December quarter, HDIL’s
revenue rose 46.9% and net profit 102.9%.
vice-chairman and managing director, said, “We are on track with regard to our
target for debt reduction, which has reduced by Rs.237.45 crore, and will
continue to focus on the same in the coming quarters through project sales and
HDIL’s current debt
is Rs.4,082 crore with a debt-equity ratio of 0.40. Property analysts said that
despite slow sales, all developers had uniformly focused on bringing down debt.
Omaxe reduced debt by Rs.213 crore during the year from internal accruals and
the debt-equity ratio has been brought down to 0.76 from 0.93 in 2010-11.
Shares of Parsvnath
Developers rose 0.09% to close at Rs.52.85 Omaxe shares dropped 0.52% to close
at Rs.144.8. HDIL’s shares fell 2.39% to end at Rs.65.25.