Unitech Ltd, the nation’s largest listed real-estate company, said its net profit for the third quarter increased 33 times because it sold more home and commercial space, mostly in the Delhi’s suburbs of Gurgaon and Greater Noida.
The net profit for the three-month period endingDecember was Rs452 crore; it was Rs13.75 crore a year ago. Sales rose five times to Rs1,016 crore as Unitech completed constructing a larger number of properties. It books sales after it completes 20% of a project, not on pre-launch bookings.
The company’s shares jumped 2% to Rs464.75 on the Bombay Stock Exchange. Unitech’s stock has risen nearly 18-fold in the past 12 months.
Indian residential real estate prices surged by about 40% in each of the past two years, according to a recent CLSA Asia-Pacific Markets report. Unitech, which gets 95% of its revenue from properties in the Delhi region, is expanding to other parts of the country, including Kolkata, Chennai, Hyderabad, Kochi and Chandigarh. Whilst Unitech paid an average of Rs140 a square foot for the land in Delhi’s adjoining areas over a 15-year period, that land is now worth Rs1,000 per square foot.
The company expects that within a few years, 80% of its revenue will come from outside Delhi and its suburbs, as it looks for cheaper land.
“As we expand we will see further sustainable growth in other markets,” Sanjay Chandra, managing director, Unitech, said.
The company’s quarterly results beat the expectations of some analysts.
Siddhartha Gupta, a research analyst with Macquarie Research Equities, estimated that profits for the third quarter, which ended 31 December, would be Rs178.50 crore on sales of Rs770 crore.
The company has a land bank of about 11,000 acres , the highest for any listed company.
“It’s the first mover advantage,’’ Gupta said, refering to Unitech ‘s cheap land acquisition price.
The company said it launched a number of projects during the quarter including the Unitech Verve at Greater Noida, Uniworld City in Kolkata and Rohini Amusement Park, which has space for retailers.