How was the performance of DLF in a fairly difficult quarter for real estate companies?

DLF reported 6.16% fall in sales revenues for the Sep-20 quarter at Rs.1610 crore. Thankfully, due to its sound balance sheet, DLF managed a sharp turnaround after a very bad performance in Jun-20 quarter due to COVID. Finally, revenues are almost back to the pre-COVID levels.

Operating profits for the quarter ended Sep-20 was nearly 176% higher on a comparable yoy basis at Rs.310 crore on the support of substantially lower financing costs due to reduced debt as well as substantially a fall in other expenses in the quarter.

That was not the case with the net profits. It was down sharply by 48.64% at Rs.228 crore, largely due to an extraordinary write-off in the Sep-20 quarter combined with an extraordinary gain in the Sep-19 quarter. This double whammy magnified impact on the bottom line.

As a result, margins came under pressure. For the Sep-20 quarter, the operating margins or OPM was up 3-fold at 19.28%. The net profit margins, in contrast, virtually halved to 14.15% due to the dual impact of extraordinary items.