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DLF's consolidated net profit in Q2 FY09 stood at Rs.1934 crore, down from Rs.2018 crore reported in Q2 FY08 (year on year or YoY decline of 4.16 percent).

EBITDA also decreased from Rs.2363 crore to Rs.2313 crore in the September quarter (YoY decline of 2.11 percent).

However, consolidated revenue increased by 14.66 percent YoY from Rs.3349 crore to Rs.3840 crore.

The non-annualized earnings per share or EPS for the quarter was Rs.11.34.

Highlighting its achievements, DLF said that as on September 30, 2008, it has delivered 2 million sq. ft (msf) of built-up space in commercial offices and homes segment (including launch of premium homes in New Gurgaon and Kochi) while 64 msf of area is under construction.

"From last year, we started mid-income housing...It has reached a larger portion of our business, therefore there is a natural compression on our margins due to product mix," said Rajiv Singh, vice chairman, DLF, commenting on the corporate results.

According to the company, high interest rates and severe cash crunch have made an adverse impact on the real estate sector with real estate companies continuing to face tight monetary conditions.

"If restrictive conditions continue, we expect industry outlook to weaken further," DLF said in a statement.

However, robust business model, geographic and product segment spread across has benefited the company's performance, it added.

"Our performance has been consistent with our plans, despite tighter liquidity scenario and looming prospects of lower GDP growth," Singh said.

Looking ahead, DLF said its outlook on business is stable, subject to stabilization of macroeconomic conditions.

According to the real estate major, once the business environment becomes more conducive, the company would be able to capitalize on future growth opportunities, given its strong foundation and current growth strategy.

While technological upgradation and commodity cycle savings would get reflected in cost reduction in the forthcoming months, DLF said it would proceed with caution being exercised on capital commitments and strong cash management.

However, given the downturn in the commodity cycle, margins are likely to be protected but the volume may be impacted due to volatile market conditions, the company said.

Commenting on the strategy that DLF plans to adopt to face the current turbulence in the real estate industry, Singh said, "DLF's balance sheet and liquidity continues to remain healthy and management has been proactive towards reducing the gearing still further, so as to have sufficient cash to meet commitments and take advantage of opportunities which may arise."

"Reduction in construction costs with softening of raw material prices will help us maintain our product margins in challenging times," Singh said, adding, "We also plan to shorten our planning/design cycle, prioritize execution of projects in line with demand/product mix and reduce non-essential costs to achieve maximum efficiency."

According to Singh, DLF has planned several project launches in the coming quarters. "We expect our strong execution capabilities to contribute in a positive way in the prevailing turbulent conditions. Our efforts are aimed at increasing liquidity and optimizing returns at acceptable levels through appropriate pricing of products offered across different product segments," he said.

"The success achieved in sales of premium homes projects allows us to remain optimistic about consolidating our business and financials in the short term and to exploit opportunities in the longer term," Singh said, adding that the management would, in the short term, reduce capital intensity of the business model by bringing enhanced focus on the sales program (premium homes & commercial complexes) and rationalize capital spend by focusing on development of properties either pre-sold or pre-leased.

"This would result in enhanced focus on product mix and further increase customer orientation," he said.