Real Estate major DLF Limited on Saturday reported a 58 per cent decline in its consolidated net profit to Rs 110 crore in the quarter ended June 30, 2017 as compared to Rs 261 crore in the year-ago period.
Its consolidated revenue during the quarter under review was at Rs 2,211 crore, up by 9 per cent from Rs 2,025 crore in the same quarter last year. The company's EBIDTA at Rs 1,067 crore was up by 18 per cent from Rs 903 crore.
"Last quarter saw the roll out of the Real Estate Regulatory Act (RERA) across the country post notification by the Central Government in November 2016. Uncertainty in the operations continued in the industry as each state government followed a different time-table for adoption of the central law, including the subsequent enactment of the Rules," it said in a statement.
The introduction of the Goods and Services Tax (GST) from July 1 also added to the uncertainty resulting in elongation of sales cycle. Back-end integration challenges continued as it was dependent upon the timing of the GST registrations of the vendors also, it said.
The real estate developer said despite growth in the economy, the demand for residential real estate continues to be soft.
"Implementation of RERA and GST has continued to elongate the sales cycle. The company expects that the sector would achieve normalcy over the next 2-3 quarters," it said.
With the reduction in the benchmark interest rate by the RBI this month and the markets guiding towards further softness in the interest rate, the sector should witness a recovery soon. The company will have a healthy pipeline of finished inventory for sale in the foreseeable future when demand returns.
"The transaction for sale of CCPS (Cumulative Compulsorily Convertible Preference Shares) in DCCDL (DLF Cyber City Developers Limited) is in advanced stages of discussion," it said.
According to the company, the demand for office leasing space continues to be good.
"Development of two new towers in Chennai SEZ is expected to be completed in FY18 (2017-18) while development of Cyber Park, Gurugram is expected to be completed in FY19 (2018-19)," it added.