Keystone Realtors reports growth despite global supply chain disruptions and a 19 per cent cost surge.
Boman Irani remains optimistic about mid-income housing resilience amidst global geopolitical tensions and construction inflation.
Mumbai-based developer Rustomjee remains confident in its ability to manage elevated construction expenses. However, Managing Director Boman Irani noted a 19 per cent rise in costs. He explained that this surge stems from the ongoing conflict in West Asia, which has subsequently placed significant pressure on global supply chains.
The company operates as Keystone Realtors Ltd in the public market. It recently reported strong growth across various operating metrics. These include pre-sales, revenue, and net profit for the April to June quarter. However, the mid-income housing segment presents specific challenges.
Passing these extra costs to homebuyers remains difficult in this sector. Therefore, the firm aims to keep both expenses and prices stable. Irani believes such disruptions usually balance out over a few years. Specifically, the firm factors in a 5 per cent annual price increase.
This strategy helps account for construction inflation over the long term. Many large developers have slowed down their redevelopment project additions recently. They cite an uncertain sales outlook and unrealistic price expectations. Moreover, competitive markets have led to high incentives for property owners.
Irani highlighted a mindset of uncalculated price increases in the current market. He noted that industry-backed wealth is flowing into real estate speculatively. This trend might not last for a long period. Some investors may exit the market once they achieve marginal gains.
Rustomjee added two new projects during the last quarter. These include a redevelopment in Goregaon and a plot in Igatpuri. The firm has a long history with redevelopment in Mumbai. It executed some of the earliest projects in the late nineties.
The developer has set a measured target for the 2027 financial year. It aims for business development worth approximately 8,000 crore rupees. This follows a target of 10,000 crore rupees in the previous year. Furthermore, a major redevelopment agreement was signed for Sion Koliwada.
Irani expects more large-scale opportunities to emerge in the future. The company continues to monitor market dynamics closely. It prioritises stability over aggressive expansion during periods of global uncertainty. This balanced approach supports the firm’s long-term operational health.
(Source: moneycontrol)
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