DLF Ltd, India's largest listed developer, reported a 45% fall in quarterly net profit, missing market expectations with the company warning of continued rising costs in upcoming quarters.
Developers saddled with large debt obligations have been hit by slowing sales and rising commodity costs as 13 interest rate hikes by the central bank push up the cost of repayments and deter potential homebuyers.
"With the macro environment continuing to remain unfavorable with high interest rates, commodity and labour cost inflation... it may take a few more quarters for the company to regain full momentum," DLF said in a statement released late on Friday.
The developer said consolidated net profit fell to Rs 2.58 billion ($52 million) for its fiscal third quarter ended December, from Rs 4.66 billion a year earlier.
Revenue for the quarter fell 7.6% to Rs 23.96 billion.
Analysts expected a net profit of Rs 4.23 billion on revenue of Rs 24.63 billion, according to Thomson Reuters I/B/E/S.
India's economic growth has slowed over the past year, while high inflation has pushed up the cost of labour, and rising prices of steel and cement have hurt developers' profit margins.
DLF has embarked on a fire-sale of $650 million worth of non-core assets by the end of March to reduce its debt burden. The company raised Rs 12 billion ($242 million) through the sale of two IT business parks during the quarter.
The sale of its Amanresorts International hotel chain, which DLF values at $400 million, hit a roadblock last month when a Chinese bidder said it had given up on the asset.
Shares in DLF, which is valued at around $7.3 billion by the market, closed down 0.8% on Friday to Rs 230.90 before the company's results were announced.