'Land related Bills may stifle real estate'
Unitech, a New Delhi-based real estate developer, has said various bills related to land and real estate sector may impact the sector’s growth if various stakeholders’ interests are not taken care of.
In a letter to shareholders, Unitech’s Executive Chairm-an Ramesh Chandra, said, “the industry is increasingly coming under the ambit of several regulatory developments. Land Acquisition, Rehabilitation and Resettle-ment Bill, 2011 and Draft Real Estate Bill, 2011 are two such developments."
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"While these are well intentioned," added Chandra, "they may run the risk of stifling the growth of the real estate sector if proper balance is not maintained between the interests of various stakeholders."
Though the company had started making good progress in ensuring quality and timely completion of projects, squeeze in funding options hit the sector in FY12 as construction activities got adversely affected.
“The lack of refinancing options disturbed the balance that the company was maintaining between the increases in construction expenditure on one side and reduction of debt on the other," said Chandra in his letter to shareholders.
The company witnessed a sharp fall in its revenue from operations in 2011-12 at Rs 2,422 crore against Rs 3,396 crore, down 29 per cent.
While its net profit got more than halved to Rs 246 crore compared with Rs 583 crore in the previous year.
Chandra expects to expand to the desired levels of construction as according to him construction activity has been picking up gradually since the beginning of the current calendar year.
Unitech, which has nearly 100 projects at various stages of execution currently, had its net debt to equity ratio at 0.45 — one of the lowest in the sector.
During the quarter ended June, 2012, the company's net profit dipped to Rs 31.76 crore against Rs 108.07 crore while revenue slipped to Rs 178.85 crore compared with Rs 277.32 crore in the previous corresponding quarter.
The company is holding its annual general meeting (AGM) on 27th September.
On the Bombay Stock Exchange, shares of Unitech closed on Monday at Rs 18.55, up 0.27 per cent.