Hindustan Construction Company (500185) Q4 00/01 earnings summary

Executive summary

• FY2000-01 delivered record pre-tax profit of Rs.42.9 crore, up 74.4% YoY, and reported net profit of Rs.26.54 crore, up 24%, despite modest growth in gross operating income.

• Efficiency gains, lower construction costs and reduced interest expense supported margins; the Rs.1,902 crore order book and Rs.1,312 crore of new orders underpinned a cautiously positive outlook.

Financial highlights

• Gross operating income rose 6.6% to Rs.565.86 crore from Rs.530.77 crore; net operating income excluding integrated JV turnover fell 7% to Rs.436.78 crore from Rs.468.94 crore.

• PBT increased 74.4% to Rs.42.94 crore from Rs.24.60 crore; reported PAT after Rs.8.07 crore of prior-year tax provision was Rs.26.54 crore versus Rs.21.40 crore.

• Construction expenses declined 16.2% to Rs.260.39 crore; operating margin increased to 22.1% from 18.2%, while interest expense fell 24% to Rs.29.68 crore.

Outlook and guidance

• FY2001-02 growth was expected to benefit from new contracts, with management anticipating higher turnover and improved profits alongside continued operational and financial efficiency measures.

• Order book was Rs.1,902 crore as of 30 June 2001; pending decisions covered 19 tenders worth Rs.4,536 crore, alongside five pre-qualified projects worth Rs.825 crore and 12 bids worth Rs.1,757 crore under evaluation.

• Planned expansion into EPC contracting would begin with hydropower projects; roads were expected to become a major growth area and could contribute about 25% of income in coming years.