• Down-side in sales for the quarter is largely on account of lower revenue of cement, real estate and investments business. Segment revenue of construction was higher by 14% to Rs 1459.34 crore (or 45% of sales). While the other core business of the company i.e. Cement register 7% fall in revenue to Rs 1371.13 crore (or 43% of sales) the segment revenue of real estate was down by 58% to Rs 254.15 crore (or 8% of sales). Similarly the revenue from investments stood lower by 96% to Rs 3.30 crore and that of power was lower by marginal 1% to Rs 3.79 crore. The segment revenue of hospitality and others were higher by 10% and 13% respectively to Rs 76.19 crore and Rs 40.31 crore respectively.

• On year on year basis, the operating margin expanded by modest 30 bps to 23.5% and that can be attributed to higher material and staff costs. The material cost (as % to sales net of stocks) was higher by 340 bps to 27.4% and staff cost was up by 30 bps to 6%. But with construction expenses and other expenses down by 370 bps and 80 bps respectively to 30.5% and 13.1% the impact of higher material and staff cost was more than offset and OPM expanded marginally by 30 bps.

• On year on year basis barring construction, Real Estate and hospitality business verticals all others have registered decline in their segment margin. The segment margin of cement business was lower by 600 bps to 2.0%, the power was lower by 490 bps to 39.3%. On the other hand the segment margin of construction was higher by 700 bps to 29.7%. The segment margin of investments turned negative compared to 98.8% in the corresponding previous period. That of other was in negative for the quarter as well as corresponding previous period.

• At EBIT level, the segment profit of construction business was higher by 49% to Rs 432.72 crore (or 76% of EBIT) facilitated by higher sales and margin expansion. But the segment profit of cement business was lower by 77% (to Rs 27.55 crore or 5% of EBIT) impacted by lower sales as well as crash in margin. The segment profit of Real Estate was lower by 53% to Rs 103.32 crore hit largely by lower sales. Benefiting together by higher sales and margin expansion the segment profit of hospitality was higher by 10% to Rs 76.19 crore. The power and others registered a segment loss of Rs 1.49 crore and Rs 3.69 crore compared to a loss of Rs 1.31 crore and Rs 0.39 crore in the corresponding previous period. The investment segment turned in a loss of Rs 2.69 crore compared to a profit of Rs 76.81 crore in the corresponding previous period.

• Other income was lower by 79% to Rs 18.28 crore and the interest cost was up by 41% to Rs 751.51 crore. The depreciation was higher by 9% to Rs 196.84 crore. Thus at PBT level it was loss of Rs 185.40 crore compared to a profit of Rs 166.18 crore in the corresponding previous period.

• EO expense for the period was Rs 0.14 crore towards prior period adjustment compared to an income of Rs 0.81 crore in the corresponding previous period. Thus at PBT after EO level it was a loss of Rs 185.54 crore compared to a profit of Rs 166.99 crore in the corresponding previous period. Taxation (including deferred tax) in absolute terms was a write back of Rs 96.83 crore compared to a provision of Rs 56.06 crore in the corresponding previous period. Thus the growth at PAT level was a loss of Rs 88.71 crore in the corresponding previous period compared to a profit of Rs 110.93 crore in the corresponding previous period.

YTD performance

Sales for 9mFY14 were higher by 2% to Rs 9654.44 crore but with 170 bps contraction in OPM, the operating profit was lower by 5% to Rs 2319.69 crore. Other income though stood higher by 39% to Rs 179.87 crore that gain was more than offset by higher interest and depreciation cost and thus it was a loss of Rs 83.42 crore at PBT (before EO) compared to a profit of Rs 562.68 crore in the corresponding previous period. EO income for the period was Rs 396.15 crore compared to mere Rs 5.02 crore in the corresponding previous period. The EO income for the quarter comprise gain of Rs 395.28 crore from sale of 16 crore equity share in Jaypee Infratech in May 2013 and prior period adjustment of Rs 0.87 crore. Inflated by higher EO income, the PBT after EO was Rs 312.73 crore, a fall of 45%. Taxation (including deferred tax) in absolute terms was a write back of Rs 0.74 crore compared to a provision of Rs 189.92 crore in the corresponding previous period. Thus the PAT de-grew by 17% to Rs 313.47 crore.

The stock hovers around Rs 39.90.