Omaxe Concentrates on Construction Business Post Real Estate Crisis

March 25, 2009	(Be the first to rate this story!)  Loading ...
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Bucking the downtrend in real estate, Delhi-based developer Omaxe is revisiting its construction business to keep the cash flows going. Recently the company bagged Rs 39.95 crore contracts from Haryana State Roads & Bridges Development Corporation. “In the past six months we have received construction orders worth Rs 650 crores and we are expected to receive another Rs 650 crore turnover in the next six months,” said Rohtas Goel, CMD, Omaxe.

“We were a construction company by origin. We see this as good way to buck the slowdown in real estate business so we have restarted construction activity after we stopped it in the year 2000 to concentrate on real estate,” added Mr. Goel. Omaxe is working on small gestation real estate projects to keep its working capital requirements low. In yet another move, it launched an integrated township in Vrindavan. This will entail 1 Room (Studio) and 2 Room apartments ranging between Rs 7.25 lakhs and Rs 14.25 lakhs targeting frequent visitors. At Rs 1700 per sq ft selling price and about Rs 1100 per sq ft cost of development, the project is targeting at 12-15% net margins.

Valued at Rs 250 crore, the company has received close to 20% of its cost of construction of the project. Thus, the project is a self-financing one. Such smaller projects will cumulatively help real estate companies to generate cash for their under construction projects. This will further help them to realise sales and reduce inventory. The stock was up 10% on Tuesday after the company made this announcement on BSE. Delivery volumes were also high. It was trading 1% below its previous close in the early trade on Wednesday.

News Published Under:   Real Estate Developers |

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