Realty firms may miss 2016-17 sales outlook on note ban

BENGALURU: Top real estate firms may fail to meet their sales guidance for 2016-17, clobbered by demonetisation just as they were beginning to emerge from a prolonged slowdown.

After three years, October 2016 saw real estate sales pick up. However, the recovery was brief as the withdrawal of high-value currency notes on November 8 hit sales in the last two months of the year.

Developers are now making last-ditch efforts to close deals in the March quarter.

In the April-December period, Bengaluru-based Prestige Estates Projects Ltd (PEPL) achieved about 52% of the sales it had targeted for the entire fiscal, and managed only a fifth of the launches planned. The company had estimated around ₹3,500 crore of new sales in 2016-17.

In a post-earnings call, Prestige Group CMD Irfan Razack said the annual sales guidance will be revised downwards. Though sales picked up post January, it is unlikely the target will be reached.

Another Bengaluru developer Sobha Ltd, whose full-year guidance for 2016-17 is 3.5 million sq ft of bookings worth ₹2,000 crore, is unlikely to be achieved, with only 68% of the value guidance being met till December, Emkay said in the report.

Developers termed NovemberDecember as a disruptive period following demonetisation, which crippled property sales and delayed buying decisions.

An executive at Pune-based Kolte Patil Developers Ltd said the company will miss its sales guidance by around 15% and expects to clock around 2 million sq ft of sales in 2016-17.

“The note ban sent a shock wave through the industry and it will take a few months for normalcy to return. Things should be okay by March-end,” said Gopal Sarda, group president.

India’s largest developer by market value DLF Ltd clocked net sales bookings of ₹760 crore in the nine months ended December 31, compared to ₹2,015 crore in April-December, 2015.

“We aren’t gung-ho on recovery and though sales are better than November-December, it will take a long time before sales come back,” said Hari Pande, vice-president of finance and investor relations at Housing Development and Infrastructure Ltd.