CORPORATE NEWS 09MONDAY, MAY 30, 2016, MUMBAI ° WWW.LIVEMINT.COM

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B Y R A J E S H K U M A R S I N G H & S I D D H A R T H P H I L I P····························NEW DELHI/MUMBAI

Coal India Ltd, the world’sbiggest producer of the fuel,

missed analysts’ estimates forfourth-quarter profit as oversup-ply of the fuel and lower interna-tional prices trimmed earnings.

Net income for the threemonths ended 31 March rose to`4,250 crore from `4,240 crore ayear earlier, the state-run firmsaid in a stock exchange filing onSunday. The profit lagged amean estimate of `4,550 crorefrom 22 analysts compiled byBloomberg. Coal deliveries dur-ing the period rose 7.8% to 145.2million tonnes.

A drop in sales per tonne to`1,429.5 from `1,542 a year agoate into the miner’s earnings,offsetting growth in deliveries. Aglut caused by its record outputlast year and a fall in global pri-ces also proved a drag on profit.Sales in the quarter were flat at`20,760 crore, as against `20,770crore a year ago, the firm said.

Power producers are strug-gling to use all their capacity, ascash-strapped regional distribu-tion companies curtail pur-chases. Coal India is counting ondemand from power utilities fol-lowing government measures toturn around indebted discoms.

Coal India produced a record165.2 million tonnes of coal inthe quarter. In April, however, itcut output and deliveries for thefirst time in 15 months, as inven-tories piled up. In a separatestatement, the firm said it willraise prices about 6.29% from 30May. BLOOMBERG

Coal India Q4 profit misses estimates

B Y M A D H U R I M A N A N D Y

madhurima.n@livemint.com····························BENGALURU

In May, two resident associa-tions in Gurgaon said that700 out of 2,200 apartments

in realty firm Unitech Ltd’s twoprojects—Uniworld Garden 2and Unitech Residences—weredelivered to buyers over the lastyear-and-a-half.

The reason, they said, wasintervention and monitoring bytop government officials and thelocal District GrievancesRedressal Committee.

Unitech, which was to givepossession of 900 flats in Uni-world Garden 2 and another1,320 in Unitech Residences bythe end of 2011, had told buyersaround that time that it was una-ble to complete constructionbecause of liquidity issues. Workhad begun in 2009.

The resident associations, rep-resenting these two projects,then took up the matter withvarious government authorities,putting pressure on the devel-oper to restart construction andstart delivering the homes.

A total of 700 apartments havebeen delivered so far and work is

Mumbai-based Lodha Group,India’s largest developer interms of sales, has deliveredabout 6,200 homes to buyersacross its projects in 2015-16.

“Project timelines may haveextended because projects havegot bigger, more complex andare dependent today on externalfactors such as supply chain,approvals and labour,” saidAbhishek Lodha, managingdirector, Lodha Group.

Lodha Group, which delivered6,200 homes last year, plans toincrease the number by 10-12%this year. “About 15-20% of ourunits may be beyond schedule,but we have shown that it is pos-sible to deliver at this scale, ifyou build a system around it. Weare better than where we weretwo years back but we are stillworking towards it,” Lodha said.

Godrej Properties Ltd, whichhas 20 million sq. ft of construc-tion going on, delivered a total of6 million sq. ft of residential andcommercial space last year.

“Delays in approval lead to asubstantial increase in the costof construction apart from caus-ing delays in handover to cus-tomers,” said Pirojsha Godrej,managing director and chiefexecutive, Godrej Properties.

Property analysts say that theworst is over in the realty sectorand sales are bound to pick upfrom here on, as prices stabiliseand demand inches back.

Tata Housing DevelopmentCo. Ltd delivered 3,000 homeslast financial year. The developerplans to hand over another 5,000homes this year, across pricesegments.

“With growing labour shortageand increasing input and com-modity costs, developers willneed to bring in newer technolo-gies not only to save cost andtime but also to improve thequality of construction,” said aTata Housing spokesperson.

going on in the remaining 1,500apartments.

In the National Capital Region(NCR), India’s largest propertymarket, several property devel-opers have either delayed orstalled their projects in Gurgaonand Noida because of landacquisition issues, a liquiditycrunch and a prolonged slow-down in sales.

“To be fair, apart from the gov-ernment’s help, Unitechexpressed theintent to deliverthese projectsand from ourside, we madesure that cus-tomers didn’tdelay in makingpayments in thelast year, so thatt h e e n t i r emoney could gotowards con-struction,” saidVikram Bishnoi,president, Resi-dences Apartments Buyers Asso-ciation, who had bought anapartment in Unitech Residen-ces.

Often, customers hold backmaking payments when they seethe project has slowed down, orwhen there is no visible sign ofconstruction, which puts thefinal brakes on a project. In thiscase, Bishnoi said they ensuredcustomers kept making theirpayments.

A Unitech spokesperson said

that there are measures and ini-tiatives that have been jointlytaken along with the customers,that have helped it deliver theunits.

“We are thankful to the cus-tomers’ group who have sup-ported and collaborated withUnitech towards delivery. And,we are working cohesively toensure that the balance units arealso delivered in due course oftime,” she said.

U n i t e c h ’ sexample high-lights a grow-ing problem inr e a l e s t a t ebusiness inIndia.

A s s a l e sturned tepidover the lastthree years,c a s h f l o w ,which breatheslife into pro-jects, dried up,p r o m p t i n g

developers to slow down con-struction, resulting in wide-spread delays.

From a delay of 6-12 months afew years back, projects todayare late by more than 2-3 years;in some cases it could be more.

It may take some time forproperty sales to pick up, but itwill take far longer for homes toactually be handed over to buy-ers, experts say.

“There would be a two-yeardelay for projects that were

launched in 2009-2010. About70% of these projects are delayedowing to land-related issues andcourt cases that they got entan-gled in and the remaining wouldbe because of financial difficul-ties faced by developers,” saidNishant Mukul, director, techni-cal, at Noida-based AmrapaliGroup. The developer’s projectAmrapali Heartbeat City inNoida, for example, has stalledover a land acquisition row, andMukul said that the matter iswith the Supreme Court.

Around 159 million sq. ft ofprojects in NCR, that wereexpected to be delivered in 2014,are two years behind scheduleand an additional 164 million sq.ft delayed between 12-24months, according to data byLiases Foras Real Estate Ratingand Research Pvt. Ltd.

“This is going to be a long-drawn battle and buyers need tobe prepared for it. Builders whohave huge inventories, and nocash to continue constructionare also finding it tough to raisefunds from financial institutions.In worst cases, there will be dis-tress sales and in others, con-sumer activism and litigationswill follow,” said Pankaj Kapoor,managing director, Liases Foras.

In Mumbai and Bengaluru,where procuring project approv-als has been a challenge but notas mired in legal issues as inNCR, larger developers have putsystems in place to stay onschedule.

LIQUIDITY CRUNCH

Property developers struggling to deliver apartments on timeTepid sales in the past three years have dried cash flow, forcing developers to go slow, causing project delays

Around 159 million sq. ft of projects in

the National Capital Region are running

two yearsbehind schedule