Unitech bottom line surges 907%

On the back of new accounting norms and aggressive sales, real estate developer Unitech Ltd today registered a net profit of Rs 357.09 crore for the quarter ended March 2007, a 907 per cent increase against the corresponding period last year.

Total income for the quarter ended march 2007 stood at Rs 884.15 crore against Rs 220.47 crore in the same quarter in the previous year.

The company's net profit surged by 1,390 per cent to Rs 1,305.50 crore for the year ended March 2007. Total income jumped by 255 per cent from Rs 954.5 crore in FY06 to Rs 3388.36 crore for the financial year ended March 2007.

The tremendous jump in net profit and sales was also on account of the new accounting practice in real estate. Realty firms can now book revenues from sales only in proportion to the completion of the construction of a project.

"Revenue recognition takes time. Revenues from some of the projects that we had launched successfully two years ago in Gurgaon and Greater Noida have just entered our books," said Sanjay Chandra, managing director.

Chandra added that while the company would sustain its growth, there would be some streamlining of profits. "I do not anticipate the company registering tremendous numbers like 900-1,400 per cent jump in net profits in the future," said Chandra.

Unitech's board today announced a bonus issue of 1:1, making it the second bonus issue in the last 12 months. The board also announced a dividend of 25 per cent for the fiscal year ended March 2007.