Realty stocks DLF, Unitech crumble further

It’s gone from bad to worse for realty stocks DLF and Unitech. While DLF shares hit a new low, correcting 15 per cent in the past one month, Unitech plunged to a 9-year low after falling 17 per cent in one month.

Both these companies have a large presence in the National Capital Region (NCR) where the realty market is going through a very bad phase, according to several consultants. Recent brokerage reports are strongly bearish on the real estate market in India, adding that prices may correct the most in Delhi.

“Inventories are at their peak and NCR will take the longest to clear,” said a recent Ambit report. New launches too, have been slowing down across India. In NCR, new launches have dropped 80 per cent in Jan-Mar 2015 period over last year. Both DLF and Unitech are struggling with high debt and weak cash flows.

Despite owning assets and land parcels in NCR, liquidating them would be not as easy. DLF reported debt of Rs 21,000 crore and net profit of Rs 510 crore as on end March, while Unitech’s debt and net loss were Rs 3,800 crore and Rs 163 crore.