Godrej Properties reported a sharp 66% fall in its net profit for the third quarter despite strong sales growth, as it was hit by a sharp increase in its input costs.
Net profit fell to Rs 25.94 cr for the three months ended December from Rs 77.24 in the same period last year. In Q2, it had net profit of Rs 44.16 cr.
This was despite a very strong showing on the top line.
Revenue from operations for the real estate major rose to 627 cr from Rs 518 cr in the year-ago period, an increase of 21% at a time when most of the players in the real estate sector are struggling to stay afloat.
In the previous quarter, it had only 492 cr of operating revenue. However, there was a sharp increase in the company’s total operating expenses to Rs 623 cr from Rs 437 cr in the year-ago period and Rs 461 cr in the preceding quarter.
As a result, operating profit fell sharply to Rs 51.5 cr for the December quarter from Rs 115 cr in the year-ago quarter and Rs 75 cr in the preceding three months.
Due to the lower profits, taxes were lower this time at Rs 21 cr versus Rs 41 cr a year ago and Rs 27 cr in Q2.
The company has been able to continue to grow fast in a negative market partly because it has successfully used depressed market conditions to drive deals with other players who have land, but not enough cash to develop it.