Unitech's FY11 profit falls 16 pc; stock up

MUMBAI: Unitech , India's second-biggest listed real estate company, reported annual profit fell 16 percent but said it was targeting sales bookings of 50 billion rupees ($1.1 billion) for the current year.

At 9:43 am, shares of Unitech were trading 2.42 per cent up at Rs 33.85 on the Bombay Stock Exchange. It touched a high of Rs 34.10 and a low of Rs 32.25 in trade so far.

Rapid urbanisation and rising income levels are expected to boost demand for houses in Asia's third-largest economy, but high inflation and rising interest rates are negatives for the sector in the near term.

India's central bank has been one of the most aggressive to tighten liquidity, raising rates nine times since March 2010, including a bigger-than-expected 50-basis-point increase this month.

Unitech said consolidated net profit fell to 5.68 billion rupees ($125.7 million) for its fiscal year ended March from 6.75 billion a year earlier. Net sales rose to 31.9 billion rupees from 29.3 billion a year earlier.

Larger rival DLF Ltd missed analysts' estimates with a 19 percent fall in quarterly profit due to cost rises and warned the central bank's actions to tighten liquidity will likely temper sector growth this fiscal year.

Unitech, which has a telecoms joint venture with Norway's Telenor , has been linked to a huge telecoms licensing scandal that has hit its shares this year.

Unitech's managing director, Sanjay Chandra , and the joint-venture firm Unitech Wireless are among 14 individuals and three companies charged by the federal police of involvement in rigging the grant of telecoms licences in 2007/08, which a state auditor has said may have cost the state coffers as much as $39 billion in lost revenue.

Chandra has been held in jail, pending trial. Unitech shares have lost half their value this year, compared with an 11 percent drop in the main index and a 27 percent fall in the sector index . ($1 = 45.180 Indian Rupees)