Karda Constructions Q3 profit up 78%, revenues rise by 94%

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Real estate developer Karda Constructions Limited has reported a 78% growth in its net profits for the third quarter (Q3) of the current financial year (FY20-21) on the back of a strong recovery in the real estate sector post-lockdown measures were eased by the government. The company’s net profit increased to Rs 3.74 crore in Q3 from Rs. 2.1 crore in Q2. Total revenues also improved by 94% in Q3 over Q2 revenues. The Board of Directors has also recommended Interim Dividend of Rs 0.05 per share (2.5% of face value of Equity Share) for the financial year 2020-21. The company’s business activity falls within a two business segments, viz. ‘Development of Real Estate Property’ & ‘Civil Contracting Business.’ Karda has witnessed growth in both the segments in Q3 after a flat growth in Q2 when construction activities across the nation had completely come to a standstill due to the lockdown. While Karda’s revenues from the real estate segment grew by 25.6% to Rs 21.83 crore in Q3 from Rs 17.38 Q2, its civil contracting business witnessed a phenomenal growth of 516.% to touch Rs 17.57 crore in the third quarter from Rs 2.85 crore in the second quarter, reflecting a resumption in infrastructure development and construction activities. Naresh Karda, Promoter, Chairman & Managing Director, Karda Constructions “The entire real estate sector had been impacted by the nationwide lockdown imposed on March 23, 2020 to contain the spread of COVID-19. Karda had resumed its operations in a phased manner in line with Government directives with requisite precautions. While the government’s measures from time to time to inject liquidity in the sector, keep the interest rates in check and provide rebates and sops have contributed to the recovery of the real estate sector, the timely interventions by Karda ensured a steady pick up in enquiry and sales, which had a direct and positive impact on both the topline and bottomline of the company in Q3.” The company said that its focus would be on improvising the processes, adaptable approach in business, use of technology, online and digital platforms including cost optimization for better performance and for reaching out to the millennial consumers that constitute the larger part of buyers. Earlier, Karda Constructions had announced a healthy 22.34% year-on-year (y-o-y) growth and 17.35% quarter-on-quarter (QoQ) growth in new bookings (pre-sales) in Q3 FY20-21, supported by its strong inventory build-up in ready-to-move-in and nearing-ready properties with the resumption of construction activities post-lockdown. Karda group enjoys a very high reputation for on-time deliveries and offering value for money to buyers in all the three segments viz. affordable, mid and high-income segment. Karda group has rather grown in deliverables and continues to make a healthy 25-28% EBITDA margins. The Company has a continuous pipeline of new projects planned based on JV model. Having established an excellent name for delivery and quality, the company now has managed to capitalise on its goodwill to change the model to almost a zero working capital basis for its projects. With sales increasing, interest load reduction, the company is targeting to ensure it has a low debt or zero debt balance sheet. Karda’s timely interventions like the launch of its e-booking platform to facilitate inquiries and bookings through the online medium, enhanced on-ground publicity through exhibitions, and attractive discounts and offers have been driving up residential sales.