Developers in the past year have restructured debt, sold non-core assets and tweaked the product mix, helping push up sales. This has encouraged investors to buy stocks of real estate companies and motivate analysts to revise price targets and upgrade the outlook on the sector. Reflecting the positive sentiment, the Bombay Stock Exchange Realty Index rose 58 per cent in the past month, outpacing the benchmark Sensitive index's gain of 27 per cent.
First-time home buyers have stayed away from the market ever since developers, in a bid to cash in on the market sentiment, focused on launching luxurious projects, bigger in size and priced beyond the reach of average buyers. Property prices across India more than tripled from 2003-07, owing to rising incomes, mortgage availability at inexpensive rates, higher tax benefits and speculators flocking to the market.
This has come at a time when commodity prices have dropped and several companies are seeking to lower prices to boost sales. "While the recent drop in raw material prices have been an enabler, our margins are still under pressure due to several factors like operational expenses as well as production and packaging costs, which have peaked year-on-year," said a company official.
The Children's Investment Fund Management and its affiliates have emerged as the single-largest seller of Indian stocks among foreign institutional investors.
The move comes almost a decade after lenders were seen encouraging customers to use alternate channels such as automated teller machines, phone banking and internet banking instead of branches in an attempt to cut costs. ICICI has started an initiative 'Just step in' aimed at establishing direct connection with the customers. A customer walking into an ICICI branches is now being greeted by placards and badges which says 'just ask'.
Karl-Ludwig Kley, chairman of the executive board, Merck, spoke to Business Standard about the company's plans and how it is weathering the global financial crisis.
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