PropertywalaThe first quarter results of real estate major HDIL indicate a improvement in the domestic realty sector. Not only volumes, but also prices are now moving northward.
Despite the fact that both sales as well as profit margins fell during the June quarter, the decline was less than expected and pace is also slackening. Revenues fell by 47% year-on-year to Rs 318.61 crore from Rs 601 crore in the same quarter previous year. With more than three-fourth of its revenue coming from low yielding land development and slum rehabilitation scheme projects, the margins have taken a major hit. Operating margin also fell from 58% to about 43%. Net profit stood at Rs 107.47 crore as against Rs 317.9 crore reported in the corresponding quarter of last year.
In this quarter, HDIL sold less than 1.8 million square feet of TDR at an average price of Rs 1,500 per square feet. It is expected to cumulatively sell close to 6-7-million square feet of TDR in financial year 2010. HDIL has managed to restructure major part of its debt liability and repayments would be due only by October 2010. On account of completion of the mall and multiplex at Kandivili, a Mumbai suburb, about Rs 21 crore worth of investments have been transferred to fixed assets from the Profit & Loss account in the current quarter. As the company follows the project completion method for revenue recognition, it is only by 2011 when the ongoing residential projects would get completed. On the airport project, phase I is expected to be complete by fiscal year 2010 and land acquisition for other parts of project is going on. Recently the company has entered into a rental-housing scheme with MMRDA. This is expected to add 30 million square feet of space to its existing 196-million square feet of land bank.
