Pradeep Jain, Parsvanath Developers speaking to CNBC-TV18 about RBI's move of hiking key lending rates by 50bps each said, this was quite unexpected and would lead to an increase in cost of funds for the real estate developer.
The cost and availability of funds would be a concern going forward for the company. However, he said that the rate hike would not have a large impact on earnings growth because the company would be passing the cost increase to the consumers. What's new for your portfolio? Check out Real Estate Funds Q: You have been in the past quite critical of the rate hikes from RBI and today it has come 50 bps, what kind of impact do you see on the business because of this? A: Yet again this move of increasing the repo and reverse repo by 50 bps was quite unexpected. As a result of this, we foresee the cost of funds and availability of the funds as a concern going forward. As a real estate developer we have no option but to pass this to the consumer because this hike will have an impact on our input cost. Government needs to create a supply side to control the inflation and to increase the repo and reverse repo which will lead to increase in the cost of funds is not a solution to control the inflation. Q: The lag effect of the previous rate hikes is being felt now specifically within sectors like yours, how much do you think it could go ahead and impact earnings growth, do you think it could be substantial for the sector as a whole and for your company? A: I donDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
