Unitech Ltd., India s second-biggest developer, said first-quarter profit fell 63 percent on slowing

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property demand.

Net income fell to 1.58 billion rupees ($33 million) for the three months to June 30, from 4.23 billion rupees, the developer said in a statement yesterday. The profit was lower than the 2.1 billion rupee median estimate of five analysts surveyed by Bloomberg News.

Sales halved to 5.15 billion rupees during the quarter, from 10.3 billion rupees a year earlier. That compared with a 7.25 billion rupee median estimate of surveyed analysts.

Unitech, DLF Ltd. and other developers are focusing on building homes for middle-income groups, moving away from luxury housing as the economic slowdown dried up demand for costlier apartments. Affordable housing will account for about 70 percent of Unitech s sales volumes in future, Managing Director Sanjay Chandra said in May, without providing comparative figures.

The property company s shares more than doubled this year on investor optimism declines in home prices and borrowing costs will revive demand. Unitech raised 54 billion rupees selling shares and properties in the quarter to June 30.

The developer sold 27.9 billion rupees of shares last month in addition to 16.2 billion rupees of shares in April and disposed of properties for 10 billion rupees in June. The cash will help the developer cut debt and spend on new projects. Unitech restructured about 95 percent of its debt after the global financial crunch pushed it into a funding crisis last year, Chandra said on May 26.

Reducing Debt Unitech plans to reduce its debt by 17 billion rupees by March 31, R. Nagaraju, general manager for corporate planning and strategy, said in May. The company had 89 billion rupees of debt as of March, down from 109 billion in December, according to its Web site.

The company plans to develop 30 million square feet of space in the year to March 31. About 90 percent of that will be for homes across 15 cities, the company said on its Web site. Sales slowed to as few as four to five units a month between October and February before picking up to 800 to 900 a month, Chandra said in May.