Realty
firm Parsvnath Developers Ltd (PDL) said recently that its consolidated net
profit fell 28% in the third quarter and it failed to reduce its Rs. 1,300
crore debt because of the rising cost of building material and high interest
rates. New Delhi-based PDL’s net profit in the three months ended 31 December
fell to Rs. 22.54 crore from Rs. 31.37 crore a year earlier. The firm’s revenue
increased 6.8% to Rs. 239.62 crore.
“Our
profit has declined because of higher expenditure on construction and employees
cost besides higher interest cost,” Parsvnath Developers chairman Pradeep Jain
told reporters. The company’s net debt stood at around Rs. 1,300 crore at the
end of third quarter, he added. It had reported debt of about Rs. 1,200 crore
during the second quarter ended 30 September.
“Debt remains a major concern for most real estate companies. The realty index
will continue to underperform,” said Param Desai, a research analyst at Nirmal
Bang Equities Pvt. Ltd, a Mumbai-based brokerage.
Another
Delhi-based real estate firm, Ansal Properties and Infrastructure Ltd reported
a drop in third-quarter profit and revenue. Net profit fell 35% to Rs. 21 crore
from Rs. 32.37 crore a year earlier. The company’s revenue during the
October-December period, too, declined by 35.1% to Rs. 226.1 crore.
According
to a January report from brokerage IDFC Securities Ltd, despite the three months
to December being the festive quarter, new launches and sales failed to result
in any significant improvement for real estate firms. Sale of non-core assets
has become the preferred mode of reducing debt for realtors.
“There
has been an absolute slowdown. Sales dropped for most firms; results are on
expected lines,” said Sharan Lilaney, an analyst at Angel Broking Ltd.
PDL
plans to sell non-core assets in Kochi and Chennai to reduce debt, Jain said.
While the land parcel in Kochi is meant for developing an information
technology special economic zone, the Chennai plot is designated for a
mixed-use development. The firm recently invited bids to sell its commercial
tower project in central Delhi. Source: Indian Express
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