New Delhi: Realtor Parsvnath Developers Ltd’s quarterly profit more than doubled despite sales dropping close to a third, helped by tax refunds, cost cutting and other income, its chairman said on Wednesday.
Pradeep Jain also said the firm was planning to raise Rs2.25 billion by end-December through stake sales in two projects to private equity investors.
Cash-strapped Parsvnath has moved to improve its position by scouting for funds and restructuring debt. It has sold shares as well as stakes in projects to investors during this year.
Jain said the funds, along with cash flows from improving demand for housing, would help the firm reduce its debt to Rs8-9 billion by March, from the current Rs15 billion.
India’s property market has turned a corner in the last few months, recovering from lows hit earlier this year, as consumer confidence returns and banks offer attractive home loans.
Analysts say much of the demand would come from middle-income and affordable housing. Property Consultant Knight Frank Research has estimated the market for such houses at Rs3.3 trillion.
Developers, including sector leaders DLF and Unitech have shifted focus away from high-end housing that was favoured at the height of the real estate boom last year.
On Wednesday, Parsvnath said its standalone profit in the September quarter rose to Rs571.5 million from Rs228.6 million a year ago. Revenue fell to Rs1.52 billion from Rs2.17 billion a year ago.
Analysts on average were expecting profit of Rs260 million on net sales of Rs1.57 billion.
The latest quarter results include a one-time income of Rs276.2 million from sale of stake in a project. Excluding other income, interest and taxes, earnings crept up 6.7% to Rs385.4 million in the quarter.
Shares in Parsvnath had climbed up nearly three-fourths in the September quarter, compared with an 18% rise in the Mumbai market and a 42% rise in the sector index, but have since underperformed both indices.
Ahead of the results, they closed nearly 2% down at Rs136.15. The broader market ended 1.2% higher.