Nov. 3 (Bloomberg) -- Indian real estate companies face a higher risk of default on their payments as access to cash gets tougher, Citigroup Inc said in a note to clients.

DLF Ltd., the nation's biggest property developer, second- ranked Unitech Ltd., Parsvnath Developers Ltd. and Omaxe Ltd. all reported second-quarter net income declined last week as a slowing economy deters buyers and banks tighten lending requirements.

``We do not see a major recovery in the near term,'' Citigroup analysts Ashish Jagnani and Karishma Solanki said in a note to clients.

The Realty Index of the Bombay Stock Exchange has declined 84 percent this year. Investors have shunned developers on concern that a five-year rally in property prices and borrowing costs that had climbed to a seven-year high will curb demand.

Goldman Sachs Group Inc. said in a separate note that the earnings reflect a slowdown in the sector.

``We believe risks are on the downside as far as our full- year estimates are concerned,'' Goldman analysts Vishnu Gopal and Shruti Gandhi said in a note to clients today.

New Delhi-based DLF reported second-quarter profit fell 4 percent, while Unitech said net income declined 12 percent respectively. The developers reported earnings after markets closed on Friday.

To contact the reporters on this story: Sumit Sharma in Mumbai at sumitsharma@bloomberg.net.

Last Updated: November 2, 2008 23:25 EST