It was a quarter of mixed tidings for the real-estate sector with large players such as DLF, Unitech, HDIL, Sobha Developers and Parsvnath demonstrating a strong year-on-year topline growth, although net profit in certain cases continued to be under stress during Q3 FY10.

Still, positive cues such as strengthening of buyer confidence, pick-up in construction activities and response to new residential launches targeting the affordable and mid-income housing, dominated the industry Q3 performance, reinforcing hopes of a sustained recovery in the property market.

“The year-on-year growth numbers for most players in the industry will tend to look good due to the low base of last fiscal. But it also showcases the revival of the real-estate market. In the case of metros, we are seeing a V-shaped recovery,” Mr Hari Prakash Pandey, AVP Finance & Investor Relations, Housing Development and Infrastructure Ltd HDIL, said.

India largest realtor DLF notched consolidated revenue of Rs 2,152 crore in the third quarter of FY10, a 43 per cent rise on a year-on-year basis and 19 per cent sequentially. But the consolidated net profit, at Rs 468 crore, fell 30 per cent from a year ago. DLF reported sales bookings of 3.1 million sq.ft msf in the quarter year to date FY10 sales booking at 8.5 msf, led by volume recovery with demand in both suburban and city centric residential segments.

Pick up in sales

“We are seeing continued buoyancy in business…The sales volumes have picked up and even luxury and high-end segments have outperformed our expectations,” DLF Executive Vice-President (Finance), Mr Saurabh Chawlatold, analysts in a conference call recently.

Unitech total income for the quarter increased 55.49 per cent year on year to Rs 788.32 crore; the net sales at Rs 774.46 crore were 58.2 per cent higher than the corresponding period the previous year. The net profit for the third quarter at Rs 176 crore was up 29.3 per cent.

“The bookings have shown a good growth in Q3. We did 3 msf of bookings in the just ended quarter that is more than what we did in the whole of last year, during slowdown,” a company official said. Nearly 80 per cent of the bookings have been on the affordable housing side, the official pointed out. Unitech affordable housing offerings are spread across multiple locations, including Gurgaon, Chennai, Kolkata, Mohali and Chandigarh.

HDIL recorded a jump in its total revenue and profit after tax (PAT). HDIL registered a 30 per cent growth in its total income to Rs 435.4 crore (Rs 334.73 crore in Q3 FY09); earnings at Rs 162.76 crore were 115 per cent higher than the corresponding period the previous year.

The Mumbai-based realtor said it sold 400 units in Q3 compared with 350 units in Q2 of FY10. “We launched 2.5 msf in the October-December quarter, compared with 1.2 msf a year ago,” Mr Pandey said. The company plans to launch another 2-3 msf targeting the middle-income and higher middle-income groups in the next six months.

Others in the realty pack, such as Parsvnath and Omaxe, have also clocked top-line and bottom-line growth. For Parsvnath, revenue grew more than three times to Rs 305.2 crore over the same period the previous year, while Omaxe reported consolidated net sales of Rs 280 crore for Q3 FY10, up 55 per cent over the year-ago period.

Backed by stronger sales, Bangalore-based realtor Sobha Developers net profit went up five times to Rs 40.8 crore in the just ended quarter from Rs 7.5 crore for the corresponding quarter last year. Its net sales were pegged at Rs 307 crore against Rs 180.5 crore in Q3 FY09.

Spate of launches

The Q3 numbers underline the recent spate of launches and an improvement in sales booking. More importantly, they point towards scale-up in execution of projects by builders. Unitech, for instance, claims to have added 5,000 workers every quarter to expedite the completion of its projects the workforce employed at project sites currently stands at nearly 20,000.

DLF says it commenced construction of about 2.6 msf in homes and commercial complexes Gurgaon and New Gurgaon during October-December; the total area under construction now stands at about 51 msf.

“The execution will clearly be one of the most important areas to watch out for as project clearances are completely dependent on nod from State and Central authorities. Real-estate players will have to ramp-up execution construction capabilities to match the pick-up in sale volumes,” said an industry watcher.