New Delhi: India’s largest listed developer, Unitech Ltd, said it expects its rate of growth to slow down in the coming years, even as its profit for the fourth quarter ended March rose 10 times from a year ago because it sold more completed properties.
“We may not see the kind of phenomenal growth as we saw this quarter,” said Sanjay Chandra, managing director, Unitech. “These percentages of growth in income are not sustainable. In any industry in the initial period, there is fast growth. We are projecting that there will be doubling in the sales volume in the next three years,” he added.
The net sales of the company for the full year increased by more than three times to Rs3288.33 crore from Rs926.41 crore.
Unitech’s net profit in the fourth quarter was Rs357.09 crore from Rs35.46 crore a year ago. Sales in the period increased four times to Rs848.71 crore from Rs208.05 crore. The company offered a share as a bonus for every share held, the second time in a year.
Unitech, along with developers such as rival DLF Ltd, have benefited from a tripling in the value of real estate in the last two years in India’s top metros. They purchased the bulk of their land before the prices soared and that, coupled with a booming economy and easier home loans, has stoked rapid growth for these companies.
Around 95% of Unitech’s revenue is currently from the National Capital Region, which includes the Delhi suburbs of Gurgaon and Greater Noida.
Unitech plans to invest around Rs25,000 crore in real-estate developments over the next four years to develop hotels, malls, residential and commercial office space. Unitech has already acquired land for 28 new hotel sites in cities such as Delhi, Noida, Gurgaon, Chennai and Hyderbad.
The hotels will be managed by Unitech’s partners. The company has an existing management agreement with the Marriott and the Carlson Group. It is also in talks with other hotel chains, Chandra said, without giving details.
For the year ended March 2007, the company’s net profit increased 15-fold to Rs1,305.50 crore from Rs87.65 crore during the previous year. The total debt of the company, as of 31 March 2007, was Rs4,000 crore.
Shares of the company closed at Rs595.90, up 8.93%, on the Bombay Stock Exchange on Monday.