The Hindu Business Line : Parsvnath Developers Q1 consolidated net dips 27%

New Delhi, July 31 Real estate company, Parsvnath Developers Ltd, on Thursday posted 27.6 per cent drop in its consolidated net profit for the first quarter ended June 2008, to Rs 73.96 crore, on account of a higher interest outgo and increase in staff and input costs.

The company, which had earlier announced its plans for a retail foray, is also eyeing acquisitions in the domestic market to gain a foothold in the retail business, even as it is in discussions with international retail chains for a possible partnership.

Eyeing acquisitions

“We are looking for acquisition of a mid-sized domestic retail company. In addition, we are also in talks with international players who can support us on logistics, back-end and front-end operations. While an acquisition will give us ownership of existing stores, an international partnership with offer value addition. We have appointed multiple advisors to work-out our retail strategy,” Mr Pradeep Jain, Chairman, Parsvnath Developers Ltd, said.

Results

Commenting on the company’s results, he said, “The net profit dropped due to the hike in rate of interest and also due to higher input, staff and administrative costs. Our borrowing cost is currently hovering around 12.75-13.75 per cent, which is about two percentage points higher than the same period last year,” he added.

Going forward, the company plans to offset the increase in interest and administrative costs by cutting down the tenure of projects.

consolidated revenue

On a consolidated basis, the company’s total revenue dropped about 8 per cent to Rs 380.74 crore over the year-ago period. “During Q1 of FY08, Parsvnath Landmark had contributed to the turnover of the company, but since the projects under it were completed, the same did not reflect in the quarterly results in FY09,” a company official said.

Seen standalone, the company’s net sales stood at Rs 372 crore for the quarter ended June 2008, a growth of five per cent over the year-ago period.

The net profit stood at Rs 71 crore, compared to Rs 84 crore in the corresponding period the previous year, a decline of 16 per cent.

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