News: DLF will not enter lowincome housing segment: Rajiv Singh, chairman-28-05-2022
Singh said the company would not pursue the opportunity in affordable housing, "strictly because it's a very construction intensive activity."
NEW DELHI: Realty major DLF will not enter into development of low-income housing as it is a construction intensive activity and will continue to focus on the developme nt of luxury and upper midincome residential properties, its Chairman Rajiv Singh said. In a conference with analysts, he said the company is committed to become debt-free.
Singh said the company would not pursue the opportunity in affordable housing, "strictly because it's a very construction intensive activity."
"We outsource our construction. The value addition we can look at in that business is low. I think we have already mentioned in our earlier presentations that we are generally focused on adding higher margin, both P&L (Profit and Loss) and cash flow to our portfolio.
"Right now, I think, definitely I don't want to say midincome, but definitely the so-called lower income housing, short of a social obligation which we do meet from time to time, is not part of our agenda," Singh told analysts.
The DLF Chairman noted that the company does not have presence in the lower income housing, except meeting certain social obligation.
However, Singh said the company's residential projects in New Gurugram fall in the category of middle-income housing.
"Those apartments are priced at Rs 1-1.5 crore. Nice apartments close to work centres. I think by any yardstick, Rs 1 to 1.5 crore would be what we consider mid income housing," he said.
Singh said: "It is not that we don't want to be in mid-income housing. It is not that we are not in mid-income housing. But our success is that we don't remain in mid-income housing. We take the product and work hard and convert the mid-income into high income housing. Our customers are happy and that's why we are happy. That is our real story".
He said the company does not have too much stock left in mid-income housing projects at Chandigarh and New Gurugram.
"We are more active in upper mid-income segment, if you want to use that word," he told analysts.
On sales bookings, Singh said the company has shown "a fairly good track record in sales. I do believe growth will come in the future. But again, we are not going to chase a target of growth for the sake of growth."
"If it adds value to our portfolio, we will go for sale," he said.
On debt, Singh said: "We are committed to bringing our debt to zero level."
According to an investor presentation, DLF's net debt stood at Rs 2,680 crore as of March 31, 2022. Its net debt stood at Rs 4,885 crore at the end of the 2020-21 financial year.
During the last fiscal, DLF's sales bookings jumped over two-fold to Rs 7,273 crore, driven by better demand for its properties, especially luxury homes. Its sales bookings stood at Rs 3,084 crore in 2020-21.
DLF highlighted that this has been its strongest performance in the last 10 years.
The company said it would continue to focus on tapping newer geographies by bringing new products.
It would launch new projects at multiple price points across segments to meet growing demand.
As per the presentation, DLF would focus on increasing market share in core geographies and monetising land banks.
''High margin products coupled with calibrated price hikes to offset inflationary pressure; consistent value enhancement across the product portfolio,'' the presentation said.
Recently, DLF reported a 16 per cent decline in its consolidated net profit at Rs 405.33 crore for the quarter ended March due to lower income. Its net profit stood at Rs 480.94 crore in the year-ago period.
Total income declined to Rs 1,652.13 crore during the March quarter as against Rs 1,906.59 crore in the year-ago period.
Net profit rose to Rs 1,500.86 crore during the last financial year, from Rs 1,093.61 crore in the 2020-21 fiscal. Total income rose to Rs 6,137.85 crore in FY22 over Rs 5,944.89 crore in the preceding year.
DLF is India's leading real estate developer in market capitalisation. It has developed more than 153 real estate projects and developed an area over 330 million square feet.
