Jaiprakash Associates

Standalone revenues during the quarter ended September 2011 grew 2% to Rs 3132.41 crore.

OPM worsened by 80bps to 23.9% due to increase in employee costs as % of sales and operating profits thus de-grew 1% to Rs 748.16 crore. Other income grew significantly but Interest costs and depreciation charges too rose significantly leading to 22% decline in PBT before PPA to Rs 223.18 crore.

Tax rate decreased from 60% to 42%, Net profit thus grew 11% to Rs 128.65 crore.

The cement revenues (41% of revenues) grew by 10% to Rs 1323.92 crore. However, PBIT was at loss of Rs 29.47 crore against profit of Rs 188.28 crore during the quarter.

The construction segment revenues (48% of revenues) de-grew by 1% to Rs 1554.78 crore. However, PBIT margins from the segment of the company were better by 1518bps to 36.12% during the quarter.

Real estate (6% of revenues) revenues de-grew 38% to Rs 201.76 crore with PBIT margins up by 207bps to 43.26% during the quarter.

Hotel hospitality and golf course (1% of revenues) grew by 1% to Rs 3.997 crore but losses increased from Rs 1.52 crore to Rs 6.97 crore at PBIT level.

Quarterly performance

For the Quarter ended September 2011, the Company' sales grew by 2% to Rs 3132.41 crore. The construction segment led the poor performance with revenues declining by 1% to Rs 1554.78 crore, contributing 48% to the total sales and for the real estate revenues de-grew by 38% to Rs 201.76 crore, forming 6% of total revenues. However, revenues from the cement segment grew by 10% to Rs 1323.92 crore forming 41% of the sales.

OPM fell by 80 basis points to 23.9% resulting in operating profit de-growth of 1% to Rs 748.16 crore. Other income grew by 1304% from Rs 3.99 crore to Rs 56.02 crore.

PBIT of construction grew by 71% to Rs 561.61 crore, forming 83% with 1518bps improvement in PBIT margins to 36.12% and Wind power' PBIT improved by 37% to Rs 11.1 crore (2% of total PBIT) and margins rose by 274bps to 68.86%.

PBIT for the real estate segment de-grew by 34% to Rs 87.28 crore, which formed 13% of the total PBIT and 207bps improvement in PBIT margins to 43.26%. PBIT for the cement segment was at loss of Rs 29.47 crore against profit of Rs 188.28 crore. Hotel and hospitality' losses at PBIT increased from Rs 1.52 crore to Rs 6.97 crore.

Interest expense increased by 25% to Rs 404.9 crore and depreciation charges too increased by 15% to Rs 176.1 crore. PBT before prior period adjustments thus fell by 22% to Rs 223.18 crore. Prior period adjustment was a debit of Rs 0.34 crore compared to credit of Rs 2.74 crore.

Tax rate decreased from 60% to 42% due to which PAT grew by 11% to Rs 128.65 crore.

Half year performance

The sales for the half year period remained flat at Rs 6310.26 crore. The revenues for the cement segment grew by 8% to Rs 2851.15 crore forming 44% of the total sales but construction and the real estate de-grew 6% to Rs 2829.62 crore and by 20% to Rs 548.69 crore respectively, each forming 44% and 9% of the total sales.

OPM rose by 120 basis points to 24.1% resulting in operating profit growth of 6% to Rs 1520.96 crore, as well as other income grew by 742% from Rs 7.3 crore to Rs 61.43 crore. PBIT for the construction segment grew by 86% to Rs 811.64 crore, formed 62% of the total PBIT.PBIT for the cement and cement products declined by 65% to Rs 164.52 crore, which was 13% of the total PBIT and the real estate by 6% to Rs 272.38 crore, which was 21% of the total PBIT.

Interest expense grew by 28% to Rs 831.26 crore and depreciation also went up by 15% to Rs 348.2 crore. PBT before prior period adjustments de-grew by 18% to Rs 402.93 crore. There was a prior period adjustment of (debit) Rs 0.51 crore compared to (credit) Rs 2.06 crore. PBT before EO was at Rs 402.42 crore, a 19% de-growth. EO which included profit on sale of shares was nil compared to Rs 513.16 crore on profit on sale of shares for the previous period. PBT after EO stood at Rs 402.42 crore compared to Rs 1009.62 crore, a decline of 60%.

Tax rate increased from 37% to 41%. PAT declined by 63% to Rs 235.69 crore.

FY11 performance

The top-line for the full year under review rose 28% to Rs 13215.12 crore during FY 2011 as compared to FY 2010.

OPM during the year was lower by 380 bps at 23.8% due to higher operating expenses. Thus the absolute operating profit rose by 10% to Rs 3138.9 crore. Other income increase by 163% from Rs 39.39 crore to Rs 103.59 and led to the PBIDT rise of 12% to Rs 3242.5 crore. PBDT rose only 1% to Rs 1848.32 crore as the interest cost jumped by 32% to Rs 1394.18 crore during the year under review. The depreciation allowance increased 33% to Rs 607.81 crore. Thus the PBT before PPA de-grew by 10% to Rs 1240.51 crore during the period under review.

Benefit on account of exceptional items declined by 58% to Rs 513.16 crore, garnered from the net income of sale of treasury stocks, write-off claims of Iraq work and prior period adjustment which led to a 32% fall in PBT before EO to Rs 1754.51 crore. After providing for the tax expenses at tax rate of 33% (700bps increase) the standalone net profit fell 39% to Rs 1167.78 crore but nil EO against Rs 211.94 crore in FY10 restricted PAT fall to Rs 32% at Rs 1167.78 during the year.

Shareholding Pattern

As of September 30, 2011, Promoters hold 46.88% (46.84% at end of sequential quarter), FII's hold 18.59% (19.32% at end of sequential quarter), DII's hold 12.86% (11.57% at end of sequential quarter), and others hold 21.67% (22.27% at end of sequential quarter).

The scrip closed at Rs 70.2 on 15^th November 2011 on BSE.

Jaiprakash Associates: Results

Jai Prakash Associates: Segmental results