Reality Behind Real Estate Co's

“Unitech has large number of projects where work hasn’t even started and there is no talk of how they are going to build those things. So just saying I have arranged the money, and I am going to do a little QIP and I am going to borrow some money and do it, doesn’t call for restating. Effectively, if one looks at the balance sheet, companies like Unitech is bankrupt, in all financial terms the company is bankrupt and should have been wound up long back.”
“DLF is still little better because of its assets. It sold its assets to its group company at a profit, booked the profit, did the IPO - the group company cannot pay the money back, so what will one do? - just fold back the group company- could anyone give me basis of this accounting?- I Sold at Rs 5,000 crore the company cannot raise the money, bring it back at Rs 5,000 crore and I booked a profit at Rs 2,000 crore.”
“If we look at both these companies from a financial sense, there is no reason to invest in these companies; we don’t understand the turnaround story. It is true that things are little better in the market but are those companies solvent- I guess the answer to that is no.”

CONCLUSION: The Real estate sector is definitely not a buy and we are not sure where the rally is coming from.Look at the debt of these companies.We are ignoring the 100's of crores of money they have taken from people for the projects, for which the construction has not started yet.And these companies has to build the buildings for which they have been sold for.

EXIT FROM REAL ESTATE COUNTERS>>>

CMP Of DLF 225.75

CMP of UNITECH 41.4 at 12.47 pm 13th april 2009.