Prices on an average have corrected between 12-17%, he adds.
"The threshold of the price correction is somewhere between 18-20 percent, which is more or less achieved in most of the areas and where it has not happened yet, would happen over a period of time. So at these prices demand would offtake," says Yadav.
He further adds the sales in October-November put together were better than September, which is more to do with price correction.
Yadav feels cash flow issues for the sector continue because the ability to leverage capital for buyers is quite dented on account of higher interest rates.
Also read: When realty takes a low income, high growth turn
Below is the verbatim transcript of his interview on CNBC-TV18
Q: Since the last time we spoke when the mood was fairly low in the sector have things improved at all or is the situation still very tough?
A: Last time I had said that there are some green shoots that we can see, slowly the sales are inching up given the fact that the prices have moderated and also there is some amount of adjustment in the specification of the inventory which was earlier there in the industry.
If I bifurcate the problem in two parts; one is the problem with the developers and their balance sheet and another is the problem with the overall market. As far as the developers and their balance sheets are concerned it may take time to really correct whatever has gone bad in last three years. But as far as the market is concerned, there is a slow demand offtake happening at the lower prices. By lower prices I mean - the threshold of the price correction is somewhere between 18-20 percent which is more or less achieved in most of the areas and where it has not happened yet, would happen over a period of time. So at these prices demand would offtake.
However, the reduction in interest rates is something which has been long awaited and buyers' ability of leveraging their capital is quite dented at this point of time.
So, while sales will pick up, the buyers' capital would still be quite moderate in coming. Therefore, cash flow issues may exist for some more time.
Q: Where October or November sales better?
A: Looking at an average, both put together October and November have been better than September. It is more to do with the price correction. So, wherever the price correction has happened the volumes are slowly inching up.
Q: How much have prices fallen in the last three-four months?
A: On an average between 12-17 percent the price correction is across but 20 percent is the threshold, so somewhere the markets will stabiles at this level.
Orbit Corp stock price
On November 20, 2013, at 14:15 hrs Orbit Corporation was quoting at Rs 16.15, up Rs 0.50, or 3.19 percent. The 52-week high of the share was Rs 62.90 and the 52-week low was Rs 10.10.
The latest book value of the company is Rs 82.50 per share. At current value, the price-to-book value of the company was 0.20.
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