Unitech postpones project launches

Unitech Ltd, Delhi / NCR and Kolkatta based Realty major has postponed the launch of majority of its projects due to the slowdown in the Indian property market. Unitech's 4QFY08 revenues were much below consensus estimates, decline 27% on a yoy basis; PAT declines 52% yoy, 31% qoq. Its venture into Telecom is another bleeding diversification without any value to existing shareholders.

We have verified the facts about new project launch and management was mum on the same. We are attaching a chart below which Management had presented in October-2006 about future project launches which it has failed to execute. The failure is on whopping 75-80% of the projects.

It looks like their is more pain to come from Gurgaon property market. Look at the chart above, Unitech has not launched any of the projects that it promised in Gurgaon and is already running 12 months behind schedule. No new projects are launched in Chennai, Kochi, Kolkata and Hyderabad - All of them were scheduled to be launched in Q2/Q3-2007.

It has launched one project in Bangalore and Small Portions in Noida. Looks like Unitech will follow its peer Parsvnath Developers Ltd. Unitech stock has tumbled 70% from its Jan-2008 high.

Separately, the Indian Income Tax Authorities have brought all Real Estate Deals under scanner because it involves large amount of unaccounted money aka., Black Money to catch tax evaders.