With a noticeable decrease in residential real estate sales, industry insiders predict that real estate firms will face a decline in profits during the initial quarter of the financial year 2010-11. Nevertheless, it's essential to highlight that the office market is currently on the upswing, spurred by the overall economy.
According to data gleaned from prominent stock brokerages, it is anticipated that during the June quarter, real estate companies will experience approximately a 20% increase in net profits alongside a growth of 38-40% in net sales. Last year, these companies reported a staggering 80% surge in net profits, indicating a substantial dip in both sales and profits this time around.
A stock analyst from a brokerage in Mumbai commented that when comparing figures from the June quarter of the financial year 2010, this year's numbers appear rather flat.
To illustrate, the gross margins for DLF stood at 49%, showcasing just a 4% growth. Meanwhile, Unitech reported a mere 1% increase in net profits.