BANGALORE: Revenues of 25-listed real estate companies dropped 9.30% to Rs 8143 crore in the fourth quarter of the last financial year primarily due to slow sales offtake. Many real estate companies did very little to woo back customers to the market. Buyers shied away from the market as companies held on to their pricing in a high-interest rate scenario that has dampened the sentiment further, said a report by real estate consultancy Knight Frank India.
In fact, the highest growth of 6.10% was achieved in first quarter with companies clocking Rs 6,740 crore in sales.
Operating profit of these realty firms has been dismal in the last four quarters. Rising input costs and labour cost has had a cascading effect on operating profit margins declining from 41.8% in the first quarter of last year to 34.5% in the forth quarter of the last fiscal. Operating profit stood at Rs 2,809 crore in last quarter of the previous financial year.
The Realty Index on the Bombay Stock Exchange (BSE) has dropped by more than 26% during the last one year compared to a 10% fall in the Sensex during the last fiscal . Real estate companies will have to focus on improving cash flow position, lowering inventory, reducing debt and increasing profit margins to beat slower sales.
Source:timesofindia.indiatimes.com
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