Legacy of loss

Geetu Vaid

Loss has emerged as the legacy of demonetisation drive that the developers across the country seem to be grappling with at the moment. With a number of big and small developers releasing their Q3 financial reports over the past week the impact of demonetisation  was evident in the fall in sale and in low revenues across the board. For DLF,  the debt worries increased as the realty major’s net debt rose by Rs 1,257 crore to Rs 24,397 crore in the third quarter of the current fiscal . The net debt of India’s largest realty firm was Rs 23,140 crore as on September 30, and increased further at the end of December.

The company’s cash-flows have been hit due to fall in housing sales amid negative sentiment in the property market post-demonetisation. It reported 46 per cent fall in profit at Rs 98 crore and 30 per cent dip in net sales to Rs 2,058 crore in the quarter ended December compared with the year ago period.

According to an analyst presentation last week DLF projected net debt to rise further as “weak sales and collections” would lead to operating shortfall of Rs 750-1,000 crore per quarter.

Realty firm Unitech Ltd too, reported a consolidated net loss of Rs 17.13 crore for the quarter ended December. Its net loss stood at Rs 12.25 crore in the year-ago period, Gurgaon-based developers said in a regulatory filing.

“While construction activity at the project sites has been steadily rising due to various measures such as escrow mechanisms put in place by the company, demand for residential product that was already sluggish got further adversely impacted by demonetisation,” Unitech MD Ajay Chandra said.

Meanwhile, Mumbai-based realty firm HDIL  posted 84 per cent decline in its consolidated net profit at Rs 16.22 crore for the quarter on lower sales. Its net profit stood at Rs 100.32 crore in the year-ago period

 Its total income also fell to Rs 116.44 crore in the third quarter of this fiscal from Rs 329.16 crore in the corresponding period of the previous year. 

Parsvnath Developers Ltd also reported a net loss of Rs 15.06 crore during the third quarteron lower sales. Its net loss stood at Rs 3.93 crore in the year-ago period, the company said in a regulatory filing.

Income from operations fell to Rs 55.15 crore during the October-December quarter of the 2016-17 fiscal from Rs 67.83 crore in the corresponding period of the previous year.

However, terming demonetisation as good in the long term, DLF said that note ban had an adverse impact on the market sentiments especially in the secondary market transactions, which in turn had a “negative impact on primary sales”. Most of the developers are now focussing on completing the existing projects. 

Dodging the down trend

Omaxe consolidated income up

Omaxe reported a 3 per cent increase in consolidated income from operations. The company reported consolidated income of Rs 411 cr for the quarter ended December 2016 as compared to Rs 399 cr last year. The consolidated net profit for the quarter stood at Rs 21 cr, a rise of 13 per cent as compared to Rs 18 cr posted last year.

During the quarter the company sold 0.57 mn sq.ft valued at Rs 282 crore vis-a-vis 0.79 mn sq.ft valued at Rs 276 crore in the same quarter last year. Major contributors were Group Housing projects The Resort in New Chandigarh, Hazratganj City in Lucknow & Commercial projects World Street¡¦ in Faridabad and Omaxe Connaught Place in Greater Noida.

During the quarter the company delivered 1.03 mn sq.ft of spaces. Major deliveries were at Sonepat (0.39 mn sq.ft) and Bahadurgarh (0.30 mn sq.ft).

Commenting on the Q3 results, Rohtas Goel, Chairman & Managing Director, said, “ During the months of November and December 2016, people were facing cash crunch and it affected the entire economy including real estate sector, which remained subdued. However, our emphasis on affordable housing has ensured that our projects in cities like Lucknow, New Chandigarh, Faridabad, Ludhiana and Indore did relatively better”.

NBCC Q3 net profit up 16 p c

However, state-owned construction firm NBCC Ltd has reported 16 per cent increase in its net profit at Rs 64.42 crore for the quarter ended December. Its net profit stood at Rs 55.55 crore in the year-ago period, the company said in a regulatory filing.

Income from operations rose to Rs 1,426.01 crore in the third quarter of this fiscal from Rs 1,364.61 crore in the corresponding period of the previous year.

NBCC, which is under the administrative control of Ministry of Urban Development, is present in three main segments — Project Management Consultancy (PMC), Real Estate Development and EPC Contracting.