DLF Ltd, India's top real estate developer, reported a 29 per cent fall in quarterly net profit, hit by slowing home sales in Asia's third-largest economy as high inflation and interest rates continued to deter home buyers.
DLF, which builds homes, offices and shopping malls, said late on Thursday that net profit for the June quarter was Rs 128 crore, compared with Rs181crore a year earlier.
Income from operations fell 25 per cent to Rs 1725 crore, the company said.
While Prime Minister Narendra Modi's election triumph two months ago and his promises of economic revival buoyed business confidence and India's financial markets, home buying has been slow as consumers remain anxious about the future.
Sales in DLF's home market in northern India fell 22 per cent in the April-June quarter while countrywide sales rose 5 per cent over the same period from a year ago, according to Mumbai-based real estate data analysis firm Liases Foras.
Founded by billionaire K.P. Singh, DLF, which is valued by the market at $5.9 billion, has been selling non-core assets to reduce its net debt, which was $3.15 billion as of end-June.
Shares in the New Delhi-based company have risen about 19 per cent since the beginning of the year, but underperformed the wider real estate index that has surged 31.1 per cent during the same period.
As of 9.28 a.m. shares in DLF traded 2.24 per cent lower at Rs 193.95 as against 0.7 per cent fall in Nifty.
($1 = 60.5500 Indian Rupees)
Copyright: Thomson Reuters 2014
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