DLF Ltd, the largest real estate developer in the country, will focus on plotted development in the short term in a bid to weather the blow from rising inflation and input costs.
In a presentation after announcing its results for the quarter and year ended March 31, the company highlighted its shift from projects involving high construction cost and delivering lower realisations, at least till the prices stabilise.
In fact, of the 12 million square feet (msf) it plans to launch this fiscal, as much as 10 msf would comprise plotted developments in Gurgaon, Indore, Chandigarh and Lucknow.
“We will be selling plots to be developed by individuals who will build houses on their own,” a company official said of the move.
Officials said DLF has secured approvals from the authorities concerned for 4 msf of the 10 msf plotted developments proposed. The remaining approvals are expected to come in by July.
DLF reported a net profit of Rs.1,639.61 crore for 2010-11, down 5% year on year, despite sales growing 29% to Rs.9.560 crore. Net profit for the March quarter was down 19% at Rs.344.54 crore.
“Profit after tax in fourth quarter is below our expectation on account of one-time cost reset due to input price inflation (all booked in Q1),” JP Morgan’s Saurabh Kumar said in a report.
The company has made a one-time adjustment for escalation in budget due to inflation to the tune of Rs.475 crore, which has subsequently dented the bottomline.
