DLF and Unitech Witness Slow Growth

December 2, 2008	(Be the first to rate this story!)  Loading ...
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DLF Ltd. and Unitech Ltd., India’s two largest property developers, were downgraded by Merrill Lynch & Co. on concern that sales will slow and prices will decline as the nation’s economic growth falters. DLF was lowered to “neutral” and Unitech was cut to “underperform,” analysts Amit Agarwal and Gagan Agarwal said in a note to clients today. Indiabulls Real Estate Ltd. was also downgraded to “neutral.” New Delhi-based Unitech, the nation’s second-largest developer, appears weaker than its larger rival and is selling assets to raise funds, the analysts wrote. The stock is the second-worst performer among Indian realty companies this year after plunging 95 percent.

Unitech fell 4.6 percent to 22.9 rupees at 10:11 a.m. local time in Mumbai trading after earlier falling to its lowest level in more than two-and-a-half years. DLF, based in New Delhi, dropped 4.3 percent to 171 rupees, the lowest since Oct. 27. Indiabulls Real Estate declined 5.2 percent to 85.7 rupees. “Unitech’s cash flow is under severe stress due to weakening sales, high net debt to equity ratio of 1.8:1 and commitments for the telecom venture,” the analysts wrote today. “We expect the pressure on the cash flow to increase due to weak sentiment which will deter buyers.” The Realty Index of the Bombay Stock Exchange fell 4.2 percent today. The index has declined 89 percent this year, outpacing the 58 percent drop in India’s benchmark Sensitive index.

News Published Under:   Real Estate Developers |

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