DLF focuses on luxury homes to drive its profit margin
DLF builder has planned to focus on building luxury homes and continue selling non-core assets to reduce debt. DLF, which saw a 37 percent erosion in its share price in 2011, is struggling to meet a target of selling non-core assets worth 60-70 billion rupees by 2012-13 to pare its debt.
Since 2007-08, DLF’s interest expense has jumped nearly six folds and was 17.1 billion rupees for the fiscal year that ended March 2011. Over the same period, net profit tanked 80 percent to 15.4 billion rupees.
DLF is struggling to reduce debt and improve profitability as high interest costs and a faltering economy weigh on balance sheets.
As DLF is struggling to reduce debt, lenders and investors are distancing themselves from investing in projects of DLF.
To improve the flow of funds as well as to meet the profit margin, DLF has planned to launch and promote high end luxurious apartments in India.
As the buyers of high end apartments and villas are not worried about the high interest rate.
DLF coming out from luxury brand business
Source: Reuters
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