HDIL posts 35.5% rise in Q2 net profit at Rs 57.86 crore

Notwithstanding a decline in sales, realty player HDIL posted a 35.5 percent increase in net profit for the second quarter ended September 30 at Rs 57.86 crore, driven by lower expenses and higher other income.

The Mumbai-based company's net profit stood at Rs 42.70 crore in the corresponding quarter last fiscal. 

Its total income for the July-September quarter declined 31.32 percent to Rs 304.84 crore from Rs 443.90 crore in the same quarter in FY14.

"The quarter has been satisfactory as most of our projects are getting completed, resulting in an improvement in sales," HDIL Vice President-Finance and Investor Relations Hariprakash Pandey said in a conference call today.

The total expenses during the quarter reduced to Rs 83.51 crore from Rs 186.63 crore, mainly because inventory levels have declined.

"Our expenses on construction has increased during the quarter mainly because most of our projects are in advanced stages of completion. We have spent nearly Rs 175 crore on getting the necessary approvals as well as fungible FSI for all our pending projects," he said.

The company's other income in the second quarter increased to Rs 39.51 crore against Rs 10.43 crore during the period a year ago. During the quarter, the company booked sales of around Rs 330 crore.

"As more and more new projects reach the completion stages, the sales from these projects will keep on increasing in the coming quarters. Already the first and second quarter of the fiscal have seen an improvement in sales. We expect the trend to continue even in the second half of FY15," he said.

The company plans to sell its floor space index (FSI) generated from the first phase of 'Planet HDIL project' at Virar in the third quarter of this fiscal.

Commenting on the results, company's Vice Chairman and Managing Director Sarang Wadhawan said, "The performance stands testimony to our twin-pronged strategy of ramping up our execution rate and reducing the debt burden. We have also started handing over possessions for some of our projects."

HDIL's consolidated debt as on September 30 reduced to Rs 3,475.53 crore compared to Rs 4,004.38 crore in the corresponding quarter last year. 

He said the slew of measures for the real estate sector by the government will result in stimulus to the real estate industry in the medium term.