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Founded in 1962, Housing Development and Infrastructure Ltd. (HDIL) is a leading real estate development company with significant operations in the Mumbai Metropolitan Region (MMR). Besides, the company has a small presence in Kochi, Hyderabad and Pune. HDIL is part of the Wadhawan Group, which has around 30 years of experience in the Mumbai real estate market and has around 100 m square foot (msqft) of completed projects to its credit.
Impacted by the slowdown in demand for real estate coupled with the severe liquidity crisis, HDIL reported a 27% YoY decline in revenues during FY09. However, the company was able to improve its margins by 7.3% YoY. Net profits dropped by 44% YoY on the back of a sharp rise in interest costs, which rose to nearly 34% of sales as against 6% in FY08. On a year on year basis, interest costs were higher by 320%.
At the end of June 2009, HDIL had a land reserve equivalent of 196 msqft of saleable area. Of this, nearly 87% lies in MMR, while the balance lies in cities such as Hyderabad, Kochi and Pune. HDIL had nearly 64 msqft of area under construction at the end of the quarter, of which nearly 80% was towards slum rehabilitation scheme (SRS) projects. The balance was shared between residential commercial and retail projects. HDIL has worked out a few strategies for the medium term. The company is focusing on completion of its airport slum rehabilitation project, in addition to launching residential projects in selected pockets. The company is also working on deleveraging and restructuring capital and recently raised nearly Rs 17 bn through a QIP issue.