NEW DELHI – Shares in India’s biggest property developer DLF rose on Tuesday after posting better-than-expected earnings for the three months to June.
DLF, controlled by billionaire Kushal Pal Singh and his family, reported late Monday that net profit fell 18 percent to 2.9 billion rupees ($53 million) in the fiscal first quarter, from 3.58 billion rupees a year earlier.
The figure topped the 2.6 billion rupee profit forecast by analysts in a Dow Jones Newswires poll, sending its shares 1.44 percent higher at 214.35 rupees in morning trade on Tuesday.
Sales during the quarter slumped 10 percent to 22 billion rupees from a year earlier as buyers held off on purchases as Asia’s third-largest economy falters under the impact of heavy borrowing costs and the weight of a global economic slump.
During the property boom years in the middle of the last decade, DLF took advantage of inexpensive interest rates to build homes, offices and malls.
But its performance now is a far cry from when it announced a full-year profit of $1.5 billion for the financial year 2007-08 — at the top of its earnings cycle — and DLF boasted market capitalisation of $40 billion.
Now the capitalisation figure is down to a little more than $6.0 billion.
DLF has been battling to sell assets as it struggles to pare debts totalling 227 billion rupees.
Interest costs climbed 265 percent to 6.2 billion rupees during the quarter.
The company, founded in 1946, has lately been focusing on its home turf of northern India, easing up on plans to pursue a nationwide strategy.
Earlier this year, Canada’s Veritas Investment Research called the company a “dream gone sour” and said its balance sheet was “stretched” — a report dismissed by DLF as “mischievous”.