HDIL Q4 net profit triples on TDR revenue

HDIL Q4 net profit triples on TDR revenue

Mumbai: Housing Development and Infrastructure Ltd’s (HDIL) net profit has almost tripled to Rs178 crore in Jan-March quarter, as its airport rehabilitation project gained traction after a lull.

The real estate company gets additional development rights, called transfer development rights (TDR) for redevelopment of slums or undertaking rehabilitation projects, which it then trades for a profit.

“In the last quarter around 95% of the income came in from TDR," HDIL managing director Sarang Wadhawan said.

The company’s TDR in volume terms for fourth quarter was at around 1.5 million square feet, while TDR prices were “strong" at Rs2,800-2,900 per square feet, he added.

The firm had posted a net profit of Rs61.92 crore in the comparable quarter of FY10. The robust earnings also sent share prices soaring to a one-week high of Rs231.8, extending gains to 8.11% on Friday. The stock has fallen nearly 27% since April.

The net profit “is marginally above our expectations... About 95% of the revenues came from the airport project, mainly from TDR," said Param Desai, analyst with Angel Broking, who was expecting a net profit of Rs171 crore.

According to the HDIL website, the firm has begun rehabilitation of slumdwellers from airport land near Kurla in central Mumbai.

The company has a net debt of Rs3,264 crore as on 31 March, Wadhawan said.

With the delayed airport project coming back on track and an improvement in the residential demand, the company’s “cash flow should improve," said Angel’s Desai.

The company would be able to reduce debt in the next six months, he added.

HDIL is planning to launch an additional 4-5 million square feet of residential projects in FY11 for middle- and higher middle-income sectors, the company said in a statement. It had launched 4.5 million square feet of residential development in FY10 and has around 61 million square feet under development as on date, Wadhawan said.

The company’s share prices closed 8.82% up at Rs228.90 a share on a strong Mumbai market that was up 1.18%.