HDIL net dips 66%; defies estimates
HDIL net dips 66%; defies estimates
Bangalore: India’s fourth largest developer by market value, Housing Development and Infrastructure Ltd (HDIL), reported a 66% decline in first-quarter net profit, well below market estimates.
Margins took a hit after the firm decided to suspend sales of floor space index (FSI) and prices of slum transfer of development rights (TDR) touched a low. HDIL is India’s largest slum redeveloper.
Slum TDR is a tradable paper issued by state governments in exchange for free development of slums by builders, who use the paper to develop other sites. FSI is the buildable area on a given plot.
“Going ahead, HDIL’s performance will depend on the volume of TDR they can sell," said Abhunav Bhandari, research analyst, PINC Research.
HDIL saw a 42.34% leap in net profit over the preceding quarter, mainly because of a boost in TDR sales. Between April and June, HDIL sold 1.8 million sq. ft of TDR at an average price of Rs1,500 per sq. ft, 70% more than its total TDR sales in 2008. It expects to sell another 6-7 million sq. ft of TDR by the end of the year.
“After selling 80% of the three projects we launched in the last quarter, we are launching another project in the Rs5,000 per sq. ft, mid-segment category," said Hariprakash Pandey, deputy general manager (finance), HDIL.
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