 "Oberoi Realty net dips 48%, Godrej Properties net up 5%")
Mumbai-based property developer Oberoi Realty posted a 48% dip in its second quarter net profit as home sales declined in the city. The company posted a net profit of Rs 64.14 crore in September quarter of FY14 as against Rs 124.36 crore in Q2 of FY13.
The company's total income fell 26% at Rs 188.96 crore in Q2 of FY14 as compared to Rs 257.66 crore in Q2 of FY13.
Vikas Oberoi, chairman & managing director, Oberoi Realty said: "...Of late, the Mumbai market has experienced some sluggishness in volumes for under construction projects though there continues to be demand for ready projects. With the buoyancy in the stock markets being one of the key drivers of buyer sentiment, we expect the momentum to catch on gradually for the real estate sector and further strengthen our sales."
According to consultant Knight Frank, home sales have dropped by a third in Mumbai in the first half of 2013. Office space transactions have also dried out, which has curbed the cashflows of developers.
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Another city based developer Godrej Properties today posted 5% jump in its net profit for the September quarter of the current financial year due to higher minority interest it accounted for during the quarter.
The company posted a net profit of Rs 34.25 crore for the Q2 of FY14 as compared to Rs 32.58 crore in the corresponding quarter of previous financial year. The company has accounted for a minority interest of Rs 26.33 crore during the September quarter of FY14 as compared to Rs 16.36 crore it did during Q2 of FY13. The minority interest includes the share of profits of its private equity partners in its various projects.
The company's total income went up 31% during the quarter at Rs 306.49 crore during the quarter compared to Rs 232.74 crore during Q2 of FY 2013.
During the quarter, Godrej Properties bought back 49% stake in Godrej Sea View Properties, its realty project in Chennai from HDFC Portfolio Management Services for Rs 116 crore.
"Sales have picked up in second quarter but we are not seeing robust sales. For those volumes to come back, we need to see improvement in general confidence level and economic growth," Pirojsha Godrej, managing director of the company said after announcing the Q2 earnings today.