New Delhi: India’s largest listed real estate developer, DLF Ltd, reported a second quarter net profit of Rs2,018 crore as it sold more developments and sales reached Rs3,349 crore.
There was no year-ago quarterly profit comparison as DLF, which raised more than Rs9,000 crore in June in India’s biggest IPO, did not provide comparable numbers. This is the second set of earnings it has reported after its public offer. On a quarterly basis, profit for the latest quarter, ended 30 September, rose about 32% from the Rs1,524 crore reported for three months ended June, partly because it paid out less in taxes in its first quarter.
“The growth in profits is because we executed more projects this quarter,” said Rajiv Singh, vice-chairman. “After the initial public offer, the tax liability was high. We have rationalized our tax structure” in this quarter.
DLF, along with rivals such as Unitech Ltd, which also reported healthy profit growth Tuesday, has benefited from India’s real estate boom, where prices have tripled in the top metros in as little as three years, as a booming economy, rising incomes and easier credit encouraged more people to buy rather than rent homes. DLF, in particular, purchased the bulk of its land bank in the last two decades in outlying areas of Delhi which, over the years, it has built into the fashionable suburb of Gurgaon. High-end apartments in Gurgaon now sell anywhere between Rs1 crore and Rs5 crore. DLF’s townhouses in Gurgaon can cost nearly double that.
Part of that boom has stoked concern of an overheated property market and forced the central bank to raise rates and commercial banks have also slowed lending to the sector. Singh said he expects rates to remain stable in the long run. However, DLF said it is looking at building more affordable houses in 30 cities such as Gurgaon, Chennai, Bangalore, Indore, Chandigarh and Kolkata. “We are on track for launch of mid-income houses in Chennai and Bangalore,” Singh said.
DLF was also recently awarded the contract to develop Bidadi Knowledge City on 9,178 acres between Bangalore and Mysore.
DLF also said it has increased its total developable area from 615 million sq. ft to 738 million sq. ft. DLF, which started out as a real estate developer, is expanding fast into other areas such as hospitality and it has signed up well known brands such as Hilton and Four Seasons to bring top end hotels to India. India’s tourism industry is likely to grow at an average 7.9% between 2008 and 2017, the fastest pace after China’s 9.1%, the London-based World Travel & Tourism Council says on its Website.
Shares of DLF closed on the Bombay Stock Exchange at Rs963.15, up 5.78%, ahead of the results. They have risen 83% since listing.
Bloomberg contributed to this story.