Parsvnath Developers has denied that banks are not lending to companies in the real estate sector. At a press conference to announce the company's third quarter financial results, Parsvnath Chairman Pradeep Jain said, “It is not true that real estate developers are not able to get loans from banks.”
Reacting to reports that since several realty firms were involved in the 2G spectrum scam, banks had stopped lending to the sector, Jain said banks may have adopted a more cautious approach in giving out loans to realty firms purchase land, according to the advice of the finance ministry and the Reserve Bank of India (RBI).
Jain also ruled out any demand slowdown in the real estate space due to the current environment of suspicion around the industry. Replying to a question on why Parsvnath's stock had taken a beating recently, he said, “We are yet to come to a conclusion on why that happened.” He, however, hinted that cartelisation had hit stock prices.
Parsvnath Developers net profit rises 25.9%
Parsvnath Developers recorded a 25.9 per cent rise in its consolidated net profit for the quarter ended December at Rs 31.4 crore. In the corresponding period last year, the company's net profit stood at Rs 24.9 crore. The consolidated total income dropped 26.5 per cent to Rs 224.3 crore from Rs 305.3 crore in the year-ago period.
The company informed the Bombay Stock Exchange that the board of directors had approved the reappointment of Pradeep Kumar Jain as wholetime director. While Sanjeev Kumar Jain has been reappointed wholetime director and designated as managing director & chief executive officer, Rajeev Jain has been reappointed wholetime director and designated as director (marketing).
The company currently has an outstanding debt of Rs 1141 crore and aims to reduce the figure to around Rs 500 crore-Rs 700 crore by the end of this year.
Jain, while sharing his outlook on the sector and the company, pointed out that Delhi and satellite towns like Gurgaon, Ghaziabad, Noida and Greater Noida are showing good demand in the residential segment. However, when it comes to locations for the future, end users are difficult to find.
On increasing input costs, Jain said that only when they go up by more than 5 per cent, do they start to pinch. However, this too, results in price advantage for the developer, who escalates property prices.
Although Jain claimed that Parsvnath was not a distress seller, the developer may look at selling some properties in South India.
