• Sharp fall in sales was largely on account sharp fall in segment revenue of Lump-sum Turnkey Projects (LTP). Though segment revenue of Consultancy & Engineering Projects (C&EP) was higher by 3% (to Rs 299.15 crore) that is not good enough to compensate for the fall in revenue of LTP, which was down by 67% to Rs 144.04 crore. LTP business after strong order burnout in FY11, FY12 and lack of replenishment over the last 2 years have left it with an Q1FY14 opening order book of Rs 2539 crore. Order execution suffers on account of various client side issues, the revenue is seeing sharp fall. C&EP though have not seen wild swing in order intake as well as order book over the last 3 years have registered a modest 3% growth in segment revenue.
• The share of relatively high margin C&EP to the top-line has increased to 67% in Q1FY14 compared to 40% in corresponding previous period. On the other hand the contribution of LTP was down to 33% from 60% in corresponding previous period. Benefiting out of change in revenue mix the operating margin expanded by 530 bps to 26.3%. Reflecting in change in revenue mix, the staff cost was up by 1400 bps to 33.2%. Similarly the other expenses were up by 540 bps to 13.4%. On the other hand the subcontract charges and construction material consumed was lower by 580 bps and 1880 bps respectively to 21.8% and 5.4%.
• Downside in PBIT was largely on account of sharp 77% fall in LTP business. Sharp fall in LTP's PBIT was largely on account of lower sales as well as 330 bps contraction in its segment margin. Segment margin seems impact on account of under recovery of capacity/execution capability. On the other hand despite modest growth in sales, the segment profit of C&EP was down by 3% to Rs 117.25 crore, as its segment margin contract by 240 bps to 39.2%.
• Segment profit of C&EP was up by 3% (to Rs 133.58 crore) as margin expansion more than negates the impact of lower sales. On the other hand hit by both lower sales and marginal contraction in segment margin, the segment profit of LTP was lower by 78% to Rs 15.17 crore.
• Other income was lower by 7% to Rs 68.04 crore. Interest cost was nil for the quarter and corresponding previous period. The depreciation was down by 1% to Rs 2.45 crore. Thus the de-growth in PBT (before EO) was 18% to Rs 182.06 crore.
• The EO for the quarter as well as corresponding previous period was nil. The tax incidence was lower at 28.9% compared to 30.4% in corresponding previous period. And in absolute terms too it was lower by 22% to Rs 52.77 crore. Thus the PAT was lower by 16% to Rs 129.35 crore.

Promoter (President of India, holding through Ministry of Petroleum & Natural Gas) holding in the company stands at 80.4% as end of June 2013. Ministry of Petroleum & Natural Gas vide its letter dated July 09/07/2013 has granted its approval to the offer, involving disinvestment of 10% of Paid-up equity Share Capital of the Company (being 33,693,660 Equity Shares) out of its holding in the Company, by way of an 'offer for sale' in the proposed offer of the Company.

The stock hovers around Rs 133.95.