A CARE Ratings report shows that 48 real estate companies saw sales drop 3.6% in the fourth quarter
Real estate and engineering construction sectors have been hit hard during the fourth quarter as they registered de-growth post-demonetization.
The latest CARE Ratings report on corporate performance during Q4, 2017 shows that 48 real estate companies saw sales drop 3.6% in the fourth quarter of this fiscal as against 32% growth a year ago. Similarly, 40 companies in the engineering construction sector too witnessed sales fall from 14.9% to 2.3%.
On Wednesday announcing the monetary policy, Reserve Bank of India governor Urjit Patel said the growth rate in real estate and construction sectors were affected and was anticipated.
Patel said it is because of "attack on black money" as these sectors had traditionally been dealing in cash transactions.
The Q4 net profit figures too show a decline. In Q4 2016, the net profit of 48 realty companies was Rs 1,631 crore which fell to a low of Rs 529 crore in the latest quarter. For engineering construction companies too the net profit halved from Rs 2,409 crore in Q4 2016.
A poor last quarter of 2017 also negatively impacted the annual figures of the sector, with slower growth numbers.
Due to the slowdown in these two sectors, the cement industry was hit too.
"The industry sales increased but at a slower rate, and performed better at the net-profit level, registering a growth of about 19% during the year. However, the performance was skewed on account of weak performance in Q3 and Q4 as the industry was affected by the delay in execution of projects, slow construction activity and surplus inventory in urban real estate. As a good proportion of transactions happen on a cash basis, the activity had slowed down. However, the year witnessed positive profits margins on account of government spending on infrastructure. Top five players in cement industry have recorded a cumulative rise in sales by 4% in fiscal 2017," said the CARE report.
Last quarter's Gross Domestic Product (GDP) number at 6.1% snatched away the title of the fastest growing economy. A look at the recent figures released by Central Statistics Office also showed a slowdown in growth rate due to demonetization impact in the sectors like transport, hotels, real estate, construction.
SLOWING DOWN
- A CARE Ratings report shows that 48 real estate companies saw sales drop 3.6% in the fourth quarter
- 40 companies in the engineering construction sector too witnessed sales growth fall to 2.3%
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Real Estate")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}