India's real estate companies are seen posting a fall in March quarter earnings as

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sales slumped amidst the global credit crunch, analysts said.

Sequentially, however, sales improved slightly as builders reduced prices and interest rates declined, opening up a window of opportunity to restructure loans, they added.

"Liquidity seems to be improving from the builders' point of view," Shailesh Kanani, analyst at Angel Broking, said.

"Demand is still at the lower end. Comfort is not there yet on the buyers' side."

Real estate sales plunged on inflated prices and the lack of finance after five years of boom.

Since October, the central bank has cut its key lending rates by 400 basis points, most recently in early March, as the policy focus shifted to boosting demand and arresting slowing growth.

"Developers like DLF, Housing Development and Infrastructure, and Unitech have finally accepted the downturn in the physical market and announced new launches at significant lower prices," an Edelweiss report said.

"However, we believe higher volumes were a result of bunching of demand and a perceived bargain, and hence unsustainable," the Edelweiss report added.

India's realty index hit a life low of 1,297.82 points in March 2009, on the back of an 82 percent fall in 2008.

According to a Reuters poll of brokerages, Sobha Developers net profit is seen down 86 percent to 100.33 million rupees in Jan-March on net sales of 1.95 billion rupees. Net Sales was seen down 59 percent.

Net profit of Akruti City is expected to be down by 84 percent to 155.50 million rupees on net sales of 481.50 million rupees.

Akruti's Sales are seen down 66 percent, the poll showed.

Commercial, retail and premium housing continues to remain under pressure with no signs of a pick-up in demand in the near term, an earnings report by Motilal Oswal said.