DLF net profit plunges 63%

This story first appeared in DNA Money edition on Tuesday, Nov 13, 2012.

DLF Ltd, India’s largest realtor, disappointed Street by posting significant decline in consolidated profit after tax (PAT) for the second quarter. Net profit fell a whopping 63% to Rs138.51 crore compared with analyst expectations of Rs295.9 crore, which, in itself, was a decline of 20.9% on-year.

DLF’s consolidated net profit in the second quarter stood at Rs372.41 crore. On a standalone basis, the realtor registered a net loss of Rs19.54 crore in the quarter, compared with a net profit of Rs302.57 crore in the same period last year.

DLF officials were not available for a comment, nor did the company website detail the accounts at the time of going to press.
Overall income from operations (sales and other receipts) declined a little over 19% to Rs2,039.54 crore against Rs2,532.41 crore on-year previously.

Realty sector analysts said while decline in home sales appears to be the key reason behind the lower profitability, margin pressure could also another key reason. “Their margins have come down to 36% compared with 40-45% earlier. This could also be due to increase in costs,” said an analyst requesting not to be quoted because he hadn’t dissected the numbers till late Monday evening.