• Upside at top-line is largely due to strong growth in revenue of Consultancy & Engineering Projects (C&EP). The segment revenue of Consultancy & Engineering Projects (C&EP) registered 21% growth to Rs 324.48 crore. Meanwhile the segment revenue of Lump-sum Turnkey Projects (LTP) business was down by 30% to Rs 50.89 crore.
• Contribution of C&EP to top-line increased to 86% from 79% in corresponding previous period. But that of LTP was down to 14% from 21% in corresponding previous period.
• EBIT for the quarter was up by 5% to Rs 94.79 crore facilitated by strong growth in segment profit of C&EP business of the company. The segment profit of C&EP was up by 45% to Rs 90.92 crore facilitated by higher sales and 460 bps expansion in its segment margin to 28%. The segment profit of LTP crashed by 86% to Rs 3.87 crore hit by lower sales as well as lower margin. Segment margin of LTP crashed by 2940 bps to 7.6%.
• Just a marginal expansion in OPM to the extent of 40 bps to 21.8% was largely due to higher staff cost that largely offset the gain in other cost heads. Staff cost as proportion to sales was higher by 620 bps to 51.6%. But the sub contractor payment was down by 220bps to 7.9%, the construction material cost was lower by 10 bps to 3.6% and that of other expenses were lower by 420 bps to 15.1%.
• Higher staff cost seems largely due to provision of Rs 38.0943 made towards wage revision due for employees w.e.f. Januarly 1, 2017. The above includes additional expenditure to the tune of Rs 26.7640 for the period Jan 1, 2017 to June 30, 2017. Significant part of the provision made in the quarter pertains to earlier periods.
• Other income was down by 16% to Rs 45.62 crore, the interest cost was down by 375 to Rs 0.05 crore and the depreciation was up by 13% to Rs 5.97 crore. Thus the PBT was lower by 1% to Rs 121.34 crore.
• Taxation stand lower by 10% (to Rs 47.54 crore) in absolute term and the tax rate was lower at 32.9% compared to 34.9% in corresponding previous period. Thus the PAT was higher by 2% to Rs 81.38 crore.
• Earlier period tax was nil compared to a write back of Rs 0.49 crore in corresponding previous period. Thus the Net profit after PPT was up by 1% to Rs 81.38 crore. Other comprehensive expense was Rs 2.35 crore compared to an income of Rs 0.01 crore in the corresponding previous period. And thus the total comprehensive income was down by 2% to Rs 79.03 crore.

Yearly performance

Sales were lower by 4% to Rs 1448.64 crore and the operating profit was up by 53% to Rs 302.20 crore as the OPM expand by 790 bps to 20.9%. After accounting for lower other income, higher interest and lower depreciation cost the PBT was up by 19% to Rs 500.18 crore. The taxation was up by 73% to Rs 214.81 crore but the tax rate was marginally lower at 35.0% compared to 35.3% in the corresponding previous period. Thus the PAT was up by 20% to Rs 324.95 crore. After accounting for higher other comprehensive expenses of Rs 23.23 crore (up 930%) the total comprehensive income was up 10% to Rs 301.81 crore.

Segment profit of C&EP was up by 36% (to Rs 359.20 crore) facilitated by higher sales (up 16% to Rs 1165.07 crore) and 450 bps expansion in segment margin to 30.8%. However despite lower sales (down 44% to Rs 283.58 crore) the segment profit of LTP jumped up by 750% to Rs 103.55 crore largely spurred by 3410 bps expansion in segment margin to 36.5%.

Other developments

The company is in the process of buyback of fully paid up equity shares of face value of Rs 5 each not exceeding 41961780 equity shares (representing 6.23% of the total number of equity shares in the paid-up share capital of the Company) at a price of Rs 157 per equity share payable in cash for an aggregate consideration not exceeding Rs 658.7999 crore through tender offer route under Stock Exchange mechanism.

The stock hovers around Rs 149.75.