Hindustan Construction Company (500185) Q4 96/97 earnings summary

Executive summary

• FY ended 30 Jun 1997 turnover rose 26.22% to Rs 31,170.13 lakh, while profit before tax fell to Rs 407.51 lakh from Rs 1,400.63 lakh amid higher interest and depreciation and margin pressure.

• Profit after tax was Rs 324.51 lakh; the proposed dividend was reduced to Rs 1 per equity share from Rs 1.75.

Financial highlights

• Turnover was Rs 31,170.13 lakh, including Rs 6,791.62 lakh as the share of Nathpa Jhakri JV turnover; operating income excluding that share was Rs 24,378.51 lakh.

• Profit before interest, depreciation and tax was Rs 3,056.19 lakh vs Rs 3,178.85 lakh; interest rose to Rs 1,725.69 lakh from Rs 1,255.18 lakh, and depreciation to Rs 922.99 lakh from Rs 523.04 lakh.

• Profit after interest and depreciation was Rs 407.51 lakh vs Rs 1,400.63 lakh; net profit after tax was Rs 324.51 lakh vs Rs 1,050.63 lakh.

• Actual EPS was Rs 1.62 vs prospectus projection of Rs 8.97; actual book value per share was Rs 37.14 vs projected Rs 43.99.

Outlook and guidance

• Work on hand at 30 Jun 1997 totaled Rs 1,050 crore, including the balance of Nathpa Jhakri JV work.

• Decisions were pending on tenders exceeding Rs 1,850 crore; prequalification bids covered 21 projects with estimated value above Rs 2,000 crore.

• Post year-end, a joint venture secured an Ennore breakwater contract worth Rs 232 crore, scheduled over three years.

• Completion of Nathpa Jhakri work was expected to be delayed by adverse geology and unresolved contractual issues; recovery efforts were underway to make up lost time on Mumbai Water Supply Tunnel W20(A).