Mumbai: DLF Ltd , India’s top listed real estate developer, on Tuesday met street estimates with a 12% fall in quarterly net profit, hit by higher operational and land costs, with rising interest rates in Asia’s third-largest economy dampening buyer sentiment.
Property prices in major cities like Mumbai and New Delhi have more than doubled over the past two years, driven by rising income levels and rapid urbanization, but sales volumes are down as higher interest rates have started biting.
India’s central bank has been one of the most aggressive in tightening liquidity to control high inflation with 11 rate rises since March last year, including a steeper-than-expected 50 basis point increase last week.
New Delhi-based DLF said consolidated net profit fell to Rs 360 crore ($81 million) for its fiscal first quarter ended June, from 410 crore a year earlier. Total expenditure rose 26% to Rs 1505 crore in the quarter.
Analysts had expected the company to post net profit of Rs 360 crore, according to Thomson Reuters I/B/E/S.
Revenue rose 20.6% to Rs 2450 crore.
Ahead of the results, shares in DLF, valued at about $8.7 billion, closed 1.2% lower in a Mumbai market that fell 1.1%.
DLF shares are down nearly 22% this year, underperforming the broader market that has fallen about 11%. The real estate sector index is down nearly 30%.