• Down-side in sales for the quarter is largely due to lower revenue registered by construction and real estate. As the construction register sharp jump in profitability despite lower sales has powered the PBIT more than compensating for lower profitability of other business segments.

• Segment revenue of cement was higher by modest 1% to Rs 1645.18 crore (or 47% of sales). But the segment revenue of construction was lower by 5% (to Rs 1462.65 crore or 42% of sales). The segment revenue of real estate was lower by 57% (to Rs 275.47 crore or 8% of sales) and that of others was lower by 7% (to Rs 45.96 crore). The segment revenue of hospitality was up by 7% (to Rs 73.45 crore) and that of power was up by 2% to Rs 5.23 crore. The investments have seen sales reversal of Rs 8 lakh compared to sales of Rs 18 crore in the corresponding previous period.

• Construction though registered marginal 5% decline in sales, the segment profit of it was up by strong 83% to Rs 535.56 crore with the segment margin zoom by 1750 bps to 36.6%. On the other hand the cement business despite modest 1% growth in sales has registered 51% fall in segment profit to Rs 109.84 crore hurt largely by lower margin, which contracted by sharp 700 bps to 6.7%. Real estate facilitated by sharp improvement in segment margin (up 1270 bps to 44.3%) has limited the de-growth in segment profit to 40% (to Rs 122.10 crore) despite 57% fall in sales. But the segment profit of hospitality was lower by 1% to Rs 12.61 crore despite higher sales. Investments and others have registered a segment loss of Rs 0.88 crore and Rs 4.95 crore respectively compared to a profit of Rs 15.32 crore and a loss of Rs 0.79 crore in corresponding previous period.

• On year on year basis, the operating margin expanded by 420 bps to 27% and that can be attributed to construction project mix. The material cost (as % to sales net of stocks) was higher by 370 bps to 27.4% and staff cost was up by 10 bps to 5.7%. But with construction expenses and other expenses down by 640 bps and 60bps respectively to 27.9% and 13.3% the impact of higher material and staff cost was more than offset and OPM expanded handsomely.

• Other income was higher by 4% to Rs 27.19 crore and the interest cost was up by 38% to Rs 756.44 crore. The depreciation was lower by 2% to Rs 186.20 crore. Thus PBT degrew by 89% to Rs 19.66 crore.

• EO income for the period was up by 81% to Rs 7.76 crore towards prior period adjustment. Thus PBT after EO was down by 85% to Rs 27.42 crore. Taxation (including deferred tax) was a write back of Rs 73 crore compared to a provision of Rs 78.20 crore in the corresponding previous period. Thus at PAT level the degrowth moderated to just 4% to Rs 100.42 crore.

Yearly performance

Sales were lower by 2% to Rs 13116.11 crore but with 10 bps expansion in OPM, the operating profit was lower by 1% to Rs 3250.95 crore. Other income though stood higher by 18% to Rs 210.91 crore that gain was more than offset by higher interest and depreciation cost and thus it was a loss of Rs 63.76 crore at PBT (before EO) compared to a profit of Rs 741.45 crore in the corresponding previous period. EO income for the period was Rs 403.15 crore compared to mere Rs 9.30 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 8.63 crore. Inflated by higher EO income, the PBT after EO was Rs 413.89 crore, a fall of 14%. Taxation (including deferred tax) in absolute terms was a write back of Rs 73.74 crore compared to a provision of Rs 268.12 crore in the corresponding previous period. Thus the PAT de-grew by 14% to Rs 413.89 crore.

Consolidated sales were higher by 5% to Rs 19834.37 crore. But with 350 bps contraction in OPM, the operating profit was lower by 5% to Rs 6375.57 crore. After accounting for higher interest and depreciation cost as well as lower other income, it was a loss of Rs 1284.65 crore at PBT (before EO) level compared to a profit of Rs 917.33 crore in the corresponding previous period. The EO income was Rs 410.57 crore compared to mere Rs 8.07 crore in the corresponding previous period. Spurred thus by higher EO income, the loss at PBT (After EO) moderated to Rs 874.08 crore compared to a profit of Rs 925.40 crore in the corresponding previous period. Taxation was a write back of Rs 171.49 crore compared to a provision of Rs 166.79 crore in the corresponding previous period. Thus at PAT it was a loss of Rs 702.59 crore compared to a profit of Rs 758.61 crore in the corresponding previous period. Thus after accounting for minority interest the net profit was a loss of Rs 824.84 crore compared to a profit of Rs 461.79 crore in the corresponding previous period.

Other developments

The Scheme of Arrangement for sale of Gujarat Cement Plant comprising an integrated 2.4 MTPA Cement Plant at Kutch and 2.4 MTPA Cement Grinding Unit at Wanakbori owned by Jaypee Cement Corporation Limited [wholly owned subsidiary of the Company] to Ultratech Cement Limited [UCL] has been approved by the Hon'ble High Court of Judicature at Allahabad on April 17, 2014. The Scheme filed by the Transferee Company, namely UCL, before Hon'ble High Court of Judicature at Bombay had already been sanctioned on April 04, 2014. Transfer of Plant is under process and will be completed in accordance with the approved Scheme on June 12, 2014.

During the quarter the Company has signed Agreement for sale of 74% stake (9,89,01,000 equity shares owned by it) in the paid-up equity share capital of Bokaro Jaypee Cement Limited [BoJCL] a joint venture between the Company and Steel Authority of India Ltd [SAIL] to M/s. Dalmia Cement (Bharat) Limited or any of its Associates / Affiliates. The above stake sale is subject to the approval of SAIL and such other approvals, as may be necessary from lenders of BoJCL and concerned authorities. The consideration for the transaction works out to approximately Rs. 69.74 per share.

Equity Shares held by the Four Trusts, of which the Company is the sole beneficiary, numbering about 189316882 equity shares are also pledged for securing the loan obtained by the Company.

The stock hovers around Rs 72.60.