It is a fact that most of the major real estate firms have experienced a downfall in the net profit in the June quarter. The management has been blaming the operational environment including high input costs and increased interest rates as the major causes for the poor performance. According to figures the net profit of DLF ltd. decreased by 13 %, HDIL by 21.5 %, Parsvnath Developers by 19 %, Unitech Ltd. by 45 % and DB Realty by 33.5 %.
According to real estate analysts the construction costs have gone up by 30-40 in the very first quarter of 2011-12. This hike can be attributed to increase in the cost of labour and raw materials. The borrowing costs of the developers have been increased a s a result of the increase in lending rates by the central bank. According to Suman Memani, real estate analyst, PINC research, the developers are most likely to experience lower profits in the second quarter due to rising interest costs and slow sales growth. The first quarter’s revenue is a mixed story, wherein DLF and HDIL have showed profits in the year on sales while the other major real estate firms showed a dip in net profits. Also the deliveries by these firms were not upto the mark.
According to real estate analysts the construction costs have gone up by 30-40 in the very first quarter of 2011-12. This hike can be attributed to increase in the cost of labour and raw materials. The borrowing costs of the developers have been increased a s a result of the increase in lending rates by the central bank. According to Suman Memani, real estate analyst, PINC research, the developers are most likely to experience lower profits in the second quarter due to rising interest costs and slow sales growth. The first quarter’s revenue is a mixed story, wherein DLF and HDIL have showed profits in the year on sales while the other major real estate firms showed a dip in net profits. Also the deliveries by these firms were not upto the mark.
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