DLF to hike prices in select locations- Business News
facebooktwitter
Loading...

DLF to hike prices in select locations

Hit by 19 per cent fall in net profit in the fourth quarter of 2010-11, realty giant DLF has said it will increase prices of its properties in selective locations to minimise the impact of rising input costs.

 PTI   
  • New Delhi,  May 25, 2011  
  • |  
  • UPDATED   18:49 IST

Hit by 19 per cent fall in net profit in the fourth quarter of 2010-11, realty giant DLF has said it will increase prices of its properties in selective locations to minimise the impact of rising input costs.

DLF also plans to launch 10-12 million sq ft of area this fiscal across the country.

In a presentation, the country's largest realty firm said there will be "increase in selling prices where possible to offset impact of inflation".

The company, however, did not share details such as by how much the prices will be hiked, on which projects and from when the increase will take place.

"(DLF) will continue to monitor future inflation impact and revise strategies accordingly to protect margins," the presentation said.

On account of inflationary pressure, the company had a one-time impact of Rs 475 crore due to reset of costs in last fiscal. It said cement, steel and labour costs due to shortages have seen increase from 10-30 per cent.

In a conference call with analysts, DLF Group Chief Financial Officer Ashok Tyagi said: "We have never seen such dramatic movement of prices that we witnessed in last two years... Labour costs have gone up over the roof since the Commonwealth Games."

He further said the company used to purchase cement at pre-determined rate of Rs 160 per bag, which is at present ruling at about Rs 290 per bag.

"We were forced to purchase cement at market rates in the second half of the fiscal," he added.

On Tuesday, DLF reported 19.19 per cent decline in its consolidated net profit at Rs 344.54 crore for the quarter ended March 31, 2011. The sales, however, increased by 34.53 per cent to Rs 2,683.09 crore.

For the entire 2010-11, the consolidated net profit went down 4.66 per cent to Rs 1,639.61 crore, while the sales rose by 28.80 per cent to Rs 9,560.57 crore.

Talking about its future projects, DLF Executive Director (Finance) Saurabh Chawla said: "We will launch 10-12 million sq ft this fiscal, skewed more towards plotted development."

The company will focus more on launching plots than group housing as it helps in generating faster cash flows.

The presentation said out of the 12 million sq ft of planned launch, 10 million sq ft will be plotted developments in Indore, Gurgaon, Chandigarh and Lucknow, while the rest will be group housing projects in Gurgaon.

Tyagi said the firm has shifted to plotted developments in some cases from group housing projects.