New Delhi: India's largest real estate developer, debt-laden DLF Ltd said cost cuts helped its second-quarter profit rise 9 per cent as it bids to position itself for what it hopes will be a property demand revival helped by a pickup in economic growth.
DLF, burdened with $3 billion of debt and shut out of capital markets for the next three years, said late on Thursday net profit for the July-Sept quarter was 1.1 billion rupees ($17.9 million), up from 1 billion rupees in the same period a year earlier. Sales rose 3 percent to 20.13 billion rupees.
Analysts on average expected the company, which builds homes, offices and shopping malls, to post a profit of 1.08 billion rupees, according to Thomson Reuters I/B/E/S.
"With the policy and reform initiatives taken by the government we see early signs of GDP growth which should result in the revival of consumer demand," DLF said in a statement.
In its harshest-ever punishment, the Securities and Exchange Board of India last month barred DLF and some of its executives from capital markets activity for failing to disclose key information at the time of the company's record-breaking 2007 market listing. DLF has lodged an appeal against the SEBI order with India's Securities Appellate Tribunal. The indebted company received temporary relief after it was allowed to redeem its investment in mutual funds to meet its cash flow needs.
Despite the ban, DLF said in its statement late on Thursday it was "gearing up" for a future second round of commercial mortgage-backed security (CMBS), or bonds backed by rental income from office buildings and shopping malls.
"This large offering will help in improving the debt profile by reduction in interest costs and terming out the liabilities," DLF said in its statement.
