Shares of mid-and-small sized real estate companies have rallied on the bourses by up to 20% after reporting a stellar performance for the quarter ended September.
Peninsula Land, Kolte-Patil Developers, Brigade Enterprises, Ganesh Housing Corporation, Purvankara Projects, Ansal Housing and Construction, Ansal Properties and Orbit Corporation are trading higher by 7-20% compared to less than 1% rise in realty index at 1236 hours.
Peninsula Land, the Mumbai-based real estate company, has locked in 20% upper circuit at Rs 70, extending its previous day’s rally after reporting six-fold jump in net profit at Rs 82.71 crore for the quarter ended September 2012. The stock has rallied 42% from Rs 49.50 in past two trading sessions on back of heavy volumes.
Kolte-Patli Developers has surged 16% to Rs 73.85 on reporting over two-fold rise in consolidated net profit at Rs 19.60 crore on back of over robust sales in the September quarter. Total income from operations grew four-times at Rs 192 crore on year-on-year basis.
Meanwhile, the board has approved an interim dividend @20% i.e. Rs 2/- per share for the financial year 2012-13.
“The Reserve Bank of India (RBI) rate cut at the start of the year is expected to slightly benefit developers, leading to lower cost of borrowing and marginal improvement in housing demand during the quarter,” according to analyst at Angel Broking.
Analyst are of the opinion that revival in housing demand will be led by mid-market housing, which remains more sensitive to interest rate cuts.