The June quarter ’08 results for the real estate sector are expected to be lackluster. According to the estimates of brokerages, performance is likely to be much lower than the corresponding quarter in the previous year. Rising interest rates, tightening monetary policy and fall in property prices are cited as some of the concerns for the sector.

The sector is also expected to witness pressure on margins. Both small as well as large realty players are expected to post dismal performance. “In Q1FY09E, we expect companies to struggle given the difficult operating environment. We expect realty companies tso face difficulty in booking incremental sales; focus will shift towards executing ongoing projects” said an ICICI securities report. Reduced unit sales are likely to result in a drop in net sales. Growth in the overall industry sales is likely to be 39% on a year-on-year (YoY) basis. This is much lower compared to the triple digit growth reported by many of the players in the earlier quarters.

However, analysts expect that out of all the listed companies, only Indiabulls real estate may see a triple digit growth given the lower base effect. On YoY basis, revenues for DLF, HDIL and Sobha are estimated to grow at 27%, 23% and 27% respectively. On a standalone basis this growth seems to be decent. However, it is lower as compared to what these players were showing during the time of their initial public offers.