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Business News/ Companies / Company-results/  DLF March quarter net profit declines 22.8% to Rs132.39 crore
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DLF March quarter net profit declines 22.8% to Rs132.39 crore

Revenue at DLF rises 19.54% to Rs2,335.56 crore during the March quarter

DLF generated robust sales in ‘The Camellias’ project, its best performing project among its new developments, in Gurgaon till the December quarterPremium
DLF generated robust sales in ‘The Camellias’ project, its best performing project among its new developments, in Gurgaon till the December quarter

Bengaluru: DLF Ltd, India’s largest developer by market value, on Friday posted a 22.85% drop in net profit to 132.39 crore in the March quarter from a year ago.

Revenue during the quarter rose 19.54% to 2,335.56 crore.

DLF generated robust sales in ‘The Camellias’ project, its best performing project among its new developments, in Gurgaon till the December quarter.

The property market in the national capital region (NCR) continues to remain under pressure as sales remain tepid and unsold inventory levels stay high, while Mumbai continues to see sales volumes only in select residential projects.

DLF’s results were announced after market hours.

According to an earnings preview by IDFC Securities Ltd, “While DLF’s revenue is expected to be driven by older projects, operationally, we expect a weak quarter in terms of pre-sales, with no new launches. Net debt is likely to increase on account of weak operating cash flow. The key monitorable will be an update on the progress of promoters’ stake sale in the annuity business."

The realty firm has sought expressions of interest from top investors to sell a 40% stake in its rental assets arm as it seeks to pare debt, Mint had reported on 11 April.

The rental assets arm holds about 20 million sq. ft of leased-out office space and is valued at about $2 billion.

Multiple investors are likely to buy stakes in the office rental unit.

Sequentially, the developer’s net profit and revenue declined 19.24% and 17.40%, respectively.

While DLF has remained cautious on launching residential projects, it has plans to ramp up its commercial office portfolio by building new projects and will add more shopping malls to its retail portfolio.

In April, it officially launched ‘Mall of India’ in Noida, a two million sq. ft retail and entertainment space, adding a sixth shopping mall to its portfolio of retail assets.

In March, DLF said it will sell its shopping mall at Saket in Delhi to its unit for 904.50 crore as part of its plan to streamline and monetize its existing assets.

The transaction with Nambi Buildwell Pvt. Ltd, on an arm’s length basis, included the sale of the land parcel on which the 5.16 lakh sq. ft mall is situated.

This is in line with the strategy to structure ownership of existing assets in order to facilitate potential monetization either through real estate investment trusts (REITs) or otherwise, in future, subject to the necessary regulatory and statutory approvals, the company had said.

In 2015-16, DLF completed projects of about 14.07 million sq. ft, and had 33.5 million sq. ft of projects under construction at the end of FY16.

It achieved net sales of 1.14 million sq. ft at 3,150 crore during the year.

Net leasing of office space is at 1.02 million sq. ft and its overall annuity income grew to about 2,600 crore.

“During the last few quarters, the company has witnessed a large number of inquiries, signalling early green shoots of recovery for the sector. The company believes that the sector can see a turnaround in the near future," a statement from DLF said.

On Friday, DLF shares closed at 129 on BSE, up 0.86% from their previous close, while India’s benchmark Sensex index rose 1.09% to close at 26,653.60 points.

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Published: 28 May 2016, 12:39 AM IST
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