DLF Q2 net profit rises 21% to Rs 131.50 crore

New Delhi: India's largest realty firm DLF Tuesday reported 21 percent rise in consolidated net profit at Rs 131.50 crore for the quarter ended September mainly on lower expenses.

Its net profit stood at Rs 109.06 crore in the year-ago period, DLF said in a BSE filing.

However, income from operations fell by 7 percent to Rs 1,865.49 crore during July-September quarter of this fiscal from Rs 2,013.15 crore in the corresponding period of the previous year.

Total income decreased by 6 percent to Rs 1,997.02 crore from Rs 2,135.59 crore in the review period.

Commenting on the result, DLF CFO Ashok Tyagi told PTI: "One housing project has hit the revenue recognition threshold that has contributed to the increase in net profit".

The company's net profit increased despite fall in sales as its total expenses declined to Rs 1,071.13 crore from Rs 1,356.52 crore during the period under review.

Finance cost increased to Rs 705.58 crore during July- September quarter against Rs 603.11 crore in the corresponding period of previous year.

Tax expense rose to Rs 77.55 crore from Rs 43.06 crore during the review period.

On operational front, DLF's net sales booking stood at Rs 1,610 crore in the first half of this fiscal against Rs 1,230 crore in the corresponding period of the previous year.

The leasing volumes stood at 0.13 million sq ft during the first half as compared to 1.01 million sq ft in the year-ago period.

"Projects in DLF (Phase 5, Gurgaon) continue to garner reasonable interest and clock sales inflow in 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 in a statement.

"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," it added.

DLF 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," it observed.

Recently, DLF sold about 50 percent stake in its housing project at central Delhi for about Rs 2,000 crore.

Last month, the company's board decided that DLF promoters will sell their 40 percent stake in the company's rental arm DLF Cyber City Developers Ltd (DCCDL).

The proposed deal is estimated to be valued at around Rs 12,000 crore. Promoters would re-invest a significant part of the amount realised from the proposed sale in DLF Ltd, which in turn would utilise this fund to trim its debt that stood at more than Rs 21,000 crore as on June 30.