The Hindu Business Line : Real estate continues to shore up Bombay Dyeing bottomline

Just how dependent has Bombay Dyeing been on its property development business to stay in the black in the current year? Near total would be the answer, if the segment results for the quarter ended December 2006 is anything to go by.

While the textile division turned in a profit of a mere Rs 1 lakh, the polyester division posted a loss of Rs 2.94 crore.

In contrast, the real estate division generated a profit of Rs 24.04 crore, resulting in a profit before interest and tax of Rs 21.11 crore for the company as a whole. But this division has not quite been as lucrative as last year.

For the quarter ended December 2005, the division posted a profit of Rs 35.22 crore, nearly 75 per cent more than the figure for December 2006.

The comparison between the first nine months of the current fiscal and the corresponding previous period also reveals a similar trend - Rs 78.15 crore in the current year against Rs 105.28 crore earlier.

The company needs to bring more of its freehold land into real estate development as the current inventory is fast getting depleted. When its freehold land in Dadar, in central Mumbai, was converted into tradable asset of the real estate division last year, it recognised a one-time surplus of Rs 195 crore to be gradually absorbed as profits in proportion to the sale of undivided interest in the land to prospective buyers.

Accordingly, it used up as much Rs 115.06 crore of this surplus in 2005-06 itself. Further, a sum of Rs 59.18 crore has been used up in the first nine months of the current year. The residual surplus, as of December 2006, stands at only Rs 24.10 crore.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
TRAI faced with shortage of officers

No extension of deadline for mobile subscriber verification

Government has exhausted most policy options

Power sales to India to fuel Bhutan's growth

UBS Global to buy StanChart MF biz

SAIL plans to set up overseas arm

Real estate continues to shore up Bombay Dyeing bottomline

Old DD serials a big success online

For CSC, India turns power centre

Home Loans — Extended tenure, higher outgo

Financial inclusion panel may pitch for microfinance NBFCs

Q3 numbers: New private banks rock

Tax treatment of FII income

Railways on the lookout for cheaper power

Rlys sees 147 pc surge in online ticket sales