DLF Q2 net rises 21% to Rs 131 cr

Warns of liquidity issues in realty sector

Leading real estate company DLF has recorded a 21 per cent increase in consolidated profit at Rs 131.5 crore during the second quarter of the financial year 2015-16. In the same period last year, the company's profit was Rs 109.06 crore, according to filings on the BSE.

DLF's income from operations however slipped 7 per cent to touch Rs 1,865.49 crore in the July to September quarter of FY2016, compared to Rs 2,013.15 crore during Q2 in the previous year. The company's total expenses are down to Rs 1,071.13 crore from Rs 1,356.52 crore.

On Tuesday, DLF share price increased marginally by 1.26 per cent to close at Rs 120.15 on BSE.

 

In a statement, the company said that the growth in profit had been ''aided by certain projects reaching the revenue recognition threshold''. It added that projects in DLF 5 (Gurgaon) continues to garner reasonable interest and clock sales inflow in an otherwise subdued market conditions.

Various other micro markets in other geographies remain soft and revival of these markets is expected in the next 18-24 months, DLF said. ''The impact of the recent rate cuts by the Reserve Bank of India is still awaited, which can help in providing a fillip to demand in these markets.''

Sounding a warning note, DLF has said that the real estate industry continues to face liquidity issues, resulting in half finished projects. ''Low consumer interest, coupled with infrastructural constraints, delayed approval and high cost of capital afflict the industry.''

The company remains focussed on meeting all its commitments towards all stakeholders, it said. DLF has a land bank of about 300 million sq ft, of which close to 50 million sq ft is under construction.

In the recent months, DLF has been trying to monetise its portfolio of residential and commercial property to raise funds, that may help it to cut its debt which stood at Rs 21,600 crore at the end of June. The company is targeting to garner Rs 10,000 crore from strategic sale to private equity.

In September, DLF announced it was setting up an equally-owned venture with GIC, Singapore's sovereign wealth fund, to develop two residential projects in New Delhi. GIC's investment is $300 million (around Rs 1,990 crore), with DLF developing the projects.