DLF’s profit down 69%, Unitech’s 74%.

Realty majors DLF, Unitech, Parsvnath and Ansal Properties today reported their worst quarterly drop in profit in at least six years as faltering economic growth crimped demand for homes and offices.

Sales of the Kushal Pal Singh-owned company fell 62 per cent to Rs 1,366.67 crore in the three months ended December 2008 from Rs 3,598.42 crore a year earlier, the company said in a statement to the National Stock Exchange without giving more details.

DLF shares have plunged 79 per cent, surpassing the benchmark Sensitive index drop of 47 per cent in the period. Shares of the company rose 8.3 per cent on Friday to close at Rs 177.65 on the Bombay Stock Exchange.

The New Delhi-based developer’s rating was cut by a notch to A+ from AA- by Crisil on concerns of slowing sales, constraining cash flows and mounting debt.

UNITECH, the county’s second-biggest property developer, said its consolidated profit dropped 74 per cent to Rs 136.05 crore from Rs 525.78 crore. The profit also lagged analyst’s expectation of Rs 293 crore for the quarter.

The New Delhi-based company’s sales fell 57 per cent to Rs 489.39 crore in the three months to December, Unitech said in a statement to the Bombay Stock Exchange.

“Last quarter witnessed a dramatic change in the macroeconomic environment. It was characterised by tight liquidity conditions and significant demand slowdown across segments. Consumer sentiment continues to be weak,’’ Sanjay Chandra, managing director, Unitech, said.

Unitech’s main thrust during the quarter was on reviewing projects with a view to according higher priority to pre-committed projects and on generating additional cash flows through asset sales and infusion of private equity at project level. Property developers have been hit as customers, hurt by a global slowdown and climbing interest rates deferred projects and purchase of homes, after a six-year rally in property prices.

Between the second quarter and the third quarter of the calendar year 2008, residential prices have fallen by 5-10 per cent in the National Capital Region (NCR) and office rentals around 15-20 per cent between the end of calendar year 2007 and the third quarter of calendar year 2008, according to estimates by Goldman Sachs. Still, experts have called upon real estate companies to cut property prices further to boost sales and shift to affordable projects in the home segment.
 

Unitech and other developers have also been struggling to repay debt to banks and mutual funds as they fail to generate enough sales. Fitch Ratings on January 14 cut Unitech rating to junk grade on concerns of the developer’s ability to repay debt.

PARSVNATH, another property developer which announced its results today, said its consolidated third-quarter profit fell 95 per cent to Rs 5.42 crore from 112.5 crore. Sales of the New Delhi-based developers in the period dropped 80 per cent to Rs 90.52 crore from Rs 465.31 crore.

ANSAL PROPERTIES reported a loss of Rs 15.73 crore in the third quarter. It had a profit of Rs 52.15 crore in the year-ago period. Sales of the company dropped 23 per cent in the three months to December 2008 to Rs 200 crore. Unitech shares have slumped 92 per cent in the past year to close at Rs 32.15 on Friday on the Bombay Stock Exchange. The benchmark Sensitive index has declined 79 per cent in the period.

Parsvnath shares have dropped 90 per cent in the past year to close at Rs 31.4 rupees on Friday on the exchange.

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