With Q1 net up 23%, DLF leads in slowing market

With Q1 net up 23%, DLF leads in slowing market
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First Published: Fri, Aug 01 2008. 12 55 AM IST
Updated: Fri, Aug 01 2008. 12 55 AM IST
New Delhi: India’s largest real estate developer by market value, DLF Ltd, saw its net profit increase by 23% to Rs1,864 crore in the quarter ended June, its first of this fiscal year, from Rs1,515.48 crore in the year-ago quarter.
The company missed analyst expectations, but bettered operational perfomance of its closest rival and a smaller peer that reported contracted sales and earnings.
DLF’s revenue rose 23.24% to touch Rs3,846.34 crore, from Rs3,120.98 crore in the first quarter of fiscal 2008. This is the first time that DLF has reported year-on-year figures after it listed in July last year.
On a quarter-on-quarter basis, the realty firm’s revenue declined by 12% from Rs4,372.36 crore in the March quarter, and net profit shrunk 14.37% from Rs2,176.82 crore.
DLF’s operational results missed analyst expectations. A Bloomberg analyst poll had projected net profit of Rs1,950 crore on sales of Rs4,010 crore.
Shares of the firm, which declared the quarterly results after market hours, closed 3.79% higher at Rs509.30 each on the Bombay Stock Exchange. The bourse’s benchmark Sensex index, which has fallen 29.62% since January, closed up 0.5%.
In the quarter gone by, DLF realized Rs1,557 crore, or nearly 41% of revenues from a firm called DLF Assets Ltd, which is majority-owned and controlled by the family of its chairman K.P. Singh. The corresponding contribution to profit before tax, according to DLF spokesperson Sanjay Roy, was 47%. DLF Assets, established to buy and hold completed commercial assets of the developer, transferred Rs1,794 crore to DLF in the March quarter and Rs4,338 crore in 2007-08.
The Indian real estate market has slowed after nearly five years of scorching growth, with the pace of home sales slowing and commercial property rates starting to soften as interest rates rise to seven-year highs and banks tighten lending to realty projects and buyers.
Parsvnath Developers Ltd, a smaller developer, reported a 27.6% drop in its first quarter net profit at Rs73.96 crore compared with Rs102.17 crore in the year-ago period on account of increase in interest, personnel and input costs. The revenue of the company was also lower by 8.13% at Rs380.74 crore for the quarter, compared with Rs414.46 crore in the same period last year.
Company chairman Pradeep Jain said revenues in the first quarter of 2007 were higher because the company had booked one-time sales of Rs58 crore from its unit Parsvnath Landmark Developers Ltd in that quarter.
Interest cost at the company in the quarter surged more than five times to Rs17.40 crore against Rs3.28 crore from the year-ago period. “Our interest costs are high because we have many projects under execution,” Jain said, adding Parsvnath aimed to complete projects in as less as 27 months from 36 months earlier. Shares of the firm closed weaker 0.89% at Rs111.75 each.
On Wednesday, Unitech Ltd, India’s second largest developer by market value, reported a 15.8% rise in net profit in the June quarter to Rs423.31 crore. Profit expansion was slower than sales growth. The realtor’s revenue for April-June rose 17.19% to Rs1,054.37 crore, up from Rs899.67 crore in the year-ago quarter.
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First Published: Fri, Aug 01 2008. 12 55 AM IST