The diversified engineering and construction major that had consistently beaten analyst estimates in the last few quarters failed to deliver as per expectations.
The company reported Net Profit (PAT) of Rs. 870 crore, but adjusted for treasury stock sale gains, it clocked in at Rs 138 crore. This was short of street expectations, which had hoped to see PAT in a range of Rs 193.50 crore to Rs 247.20 crore as per analyst expectations surveyed by Bloomberg.
Core operating revenues during the recently concluded quarter increased 50% y-o-y to Rs 1,824.26 crore. However, it was 11.75% lower than revenues in Q1 FY10.
However, bonus issue in the ratio of 1:2 and an interim dividend of Rs 0.54 per equity share came in as a surprise.
Segmental performance
Construction, which contributes over 48% of total revenues grew 40% y-o-y but dipped 13% sequentially over Q1FY10. Operating margins rose (up 77 bps qoq) after falling over 200 bps in the year.
Falling demand and cement prices also hit the company which saw sales fall by nearly 11% over the first quarter although cement sales this quarter were up over 60% y-o-y. Real estate revenues were also up significantly over last year, from Rs 26.5 crore last year to over Rs 88 crore, however they have clocked in 7 % lower than last quarter.
The markets acknowledged this performance with the counter down 6.84% at Rs 238.20 at close on the BSE. The stock had run up significantly last fortnight - hitting a one-year high in anticipation of results. It is currently quoting at a P/E multiple of 9.6 to its reported annualized adjusted second quarter EPS and a one year forward PE of 28x Bloomberg consensus analyst FY10 EPS estimates and 23.65x of consensus FY11 analyst EPS estimates.
