Realty firms blame rising costs for performance slippage

New Delhi : The net profit in the June quarter is down for all major listed real estate companies, though most have claimed their respective performances show they’re doing well. The top managements have blamed the poor show on a challenging operational environment, citing high interest rates and elevated input cost. The net profit of DLF Ltd dipped by 13 per cent, that of Unitech by 45 per cent, HDIL by 21.5 per cent, Parsvnath Developers by 19 per cent and DB Realty by 33.5 per cent.

Analysts said construction costs had gone up by 30 to 40 per cent in the first quarter of 2011-12. This is mainly due to a sharp rise in costs of labour and raw materials. The increase in lending rates by the central bank has increased the borrowing costs of developers, they said.