Realty Sector has been the most speculative with retail interest @ maximum and highly valued sector which corrected from high of 13848 in Jan2008 to low of 1297 in March2009 whopping 90% correction and almost tripled from low of March2009 and the recovery didn’t cross 28% of the fall lowest in sectoral index.
It is not the valuation which worries when economy picks up this sector can easily catch with earnings, regulation in this sector has been dismally low and few cases of tax evasion and calculation of land bank, usage of POA= Power of Attorney are cause of concern. Income Tax Dept raid on HDIL and tax notice on DLF and UNITECH lack of development should be serious concern as in the past many Realty companies didn’t sustain in long term.
The RBI's survey of professional forecasters lowered its economic growth estimate to 6.0% for the current fiscal year through March 2010, from 6.5% in the previous survey, reflecting the impact of the poor monsoon. Economists expect inflation to hit 7%-8% by the end of March, well above the RBI's projection of 5% which would make RBI walk tightrope. RBI signals reverse of policy then Realty sector would see some negative impact as the sector is struggling to recover.
I-T dept notice to DLF seeks special audit for fiscal 2007 http://www.livemint.com/2009/10/26211516/IT-dept-notice-to-DLF-seeks-s.html?h=B
Taxman says DLF net understated by Rs400 crore http://www.dnaindia.com/money/report_taxman-says-dlf-net-understated-by-rs400-crore_1303509
Realty firms likely to report fall in revenues - Analysts expect DLF and Unitech to post a 77.11% and 44.81% decline in net profit, respectively http://www.livemint.com/2009/10/25231559/Realty-firms-likely-to-report.html?h=B
UNITECH looks weak http://akprabhakar.blogspot.com/2009/10/unitech-stock-in-focus-again.html
"If New Zealanders have a love affair with property investments, it’s one where government and regulators have acted as pimp."
