RBI Move To Keep Repo Rate Unchanged To Boost Demand In Festive Season: Ajmera Realty CEO
The central bank has kept repo rates unchanged at 6.5%. However, a possible rate cut is expected in the next policy review in December.
The Reserve Bank of India’s decision to keep the benchmark repo rate unchanged in its latest monetary policy review on Oct. 9 is likely to boost the business of realty players in the festive season, according to Ajmera Realty & Infra India Ltd. Director Dhaval Ajmera.
He told NDTV Profit that a repo rate cut would have given a major boost to the real estate sector. However, the unchanged rates will also be beneficial for the business during the festive season.
“If the rates were dropping down, this would have impacted positively with the buoyancy in the market, because somewhere the cost of construction would also have been lower. It would have impacted over there due to inflationary costs going down,” Ajmera said.
The central bank in its monetary policy committee review kept the repo rates unchanged at 6.5% for the tenth time in a row but moved to a "neutral" stance from the "withdrawal of accommodation" earlier. This, indicates a possible rate cut in the December MPC meeting.
“Overall, I think it would have had a positive impact, but nevertheless the rates not being changed is also a positive, especially with the festive season coming in now,” Ajmera said.
On the company’s performance and financials, the top executive noted that the target was to exceed the pre-sales guidance of Rs 1,350 crore for the financial year 2024–25 by at least 5–10%.
Ajmera noted that the upcoming Assembly election in Maharashtra may cause temporary roadblocks for the company, as most of the new projects are based in Mumbai.
“During this time, usually government offices are on election duty and sometimes it takes a hit on the approval processes,” he said.
However, Ajmera remained confident of overcoming the challenges and surpassing sales projections.
The real estate developer posted total sales of Rs 254 crore in the second quarter of FY25, a marginal increase of 1% compared to the same period last year. The company’s total collections were up 20% year-on-year at Rs 133 crore.
Commenting on the company’s Q2 business updates, the top executive said, “The most important thing is that we have had a massive 20% rise in our collection. That is because our efficiencies in construction have improved with work coming up faster, resulting in better collections."
Shares of Ajmera Realty & Infra India closed in the green on Wednesday with gains of 3.79% at Rs 657 apiece on the NSE, while the Nifty ended the session 0.12% lower at 24,981.95.
