• A modest 8% growth in revenue for the quarter to Rs 489.52 crore is largely on account of unprecedented rain in most part of the countries during the quarter especially in the eastern part of Southern Peninsula.
• Operating margin for the quarter was lower by 110 bps to 7.8% on year on year basis but on sequential basis the OPM was lower by 50 bps from 8.3%% in the first quarter ended June 2010. Contraction in OPM for the quarter on yoy basis is largely on account of rise in all other cost heads barring subcontract charges. While the sub-contract charges (as % to sales net of stocks) was lower by 170 bps to 51.6%, that of staff cost and other expenses were higher by 30 bps and 140 bps respectively to 10.2% and 11%. The operational expenses were higher by 310 bps to 15.4%. Higher operational charges for the quarter seem largely on account of increased fabrication works during the period.
• Other income was higher by 161% to Rs 1.34 crore and thus the PBIDT was down 3% to Rs 39.56 crore. The interest cost was higher by 91% to Rs 12.11 crore. Thus limited the growth at PBDT level was lower by 20% to Rs 27.45 crore. The depreciation was higher by 35% to Rs 3.14 crore leaving the PBT down by 24% to Rs 24.32 crore. Higher interest cost was largely on account of higher working capital borrowings as more projects were in initial stages of its projects cycle warranting mobilization funds.
• The taxation was lower by 21% to Rs 8.54 crore, but the tax incidence was higher by 110 bps to 35.1%. Thus the PAT was lower by 22% to Rs 16.48 crore. The JV partner's share was Rs 2.74 lakh as against nil in corresponding previous period. Thus limited the net profit was lower by 35% to Rs 13.73 crore.

Half yearly performance

Standalone revenue was higher by 16% to Rs 997.48 crore. With OPM contract by 10 bps (to 8.0%) the operating profit growth was limited to 14% to Rs 80.23 crore. The PAT was lower by 7% (to Rs 36.17 crore) after accounting for lower other income, higher interest and depreciation. The net profit (after adjusting for the share of partners in the JV) was lower by 16% to Rs 32.51 crore.

Management comment

Sarabeswar, Chairman & CEO of the company said, "With an order backlog of Rs 4490 crore as at 30th September 2010, we expect to grow steadily in the coming months. The macro economic conditions although sustain the growth, the increasing interest rates and climatic conditions should be favourable in the ensuing quarter.

Promoter share holding as end of September 2010 was at 50.63% unchanged from its June 2010 quarter end levels. The stock hovers around Rs 77.50.