Ircon International

Sales up 26% but net down 4% on lower other income and higher tax

Nov 18, 2019 06:11 IST capital market

Ircon International registered 21% growth in its revenue for the quarter ended Sep 2019 to Rs 1161.12 crore. Higher sale together with 120 bps expansion in operating profit margin has facilitated 42% leap in operating profit to Rs 89.36 crore. After lower other income, higher interest cost and lower depreciation the growth at PBT moderated to stand at 9% to Rs 137.21 crore. With tax incidence stand higher (by 18% to Rs 49.51 crore), the growth at PAT was up by 5% to Rs 87.70 crore.

The parent company has elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance. 20 19. Accordingly, the parent company has recognised Provision for Income Tax for the quarter and half year ended 30th September 20 19 and re-measured its deferred tax assets basis the rate prescribed in the aforesaid section and recognised the effect of change by revising the annual effective income tax rate. The rate of income tax is changed from 34.944% to 25.168% during the quarter and six months ended 30th September 2019. There-measurement of accumulated deferred tax asset has resulted in a one-time additional charge of Rs 40.46 crore.

Effective April 1, 2019, the Company has adopted IND AS 116 Leases, applied to all lease contracts existing on April I, 2019 using the modified retrospective method and has taken the cumulative adjustment to retained earnings, on the date of initial application. Accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted.

  • Operating profit margin expanded by 120 bps to 7.7% and that is largely due to fall in all cost heads except project expenses. Material cost as % to sales net of stocks was down by 1110 bps to 5.1%. The project expense was up by 1000 bps to 81.4%. And the staff cost was down by 60 bps to 5.2%. The other expense was down by 30 bps to 0.7%.
  • Other income was down by 19% to Rs 56.89 crore and thus the PBIDT was up by 10% to Rs 146.25 crore. The interest cost was up by 36% to Rs 6.10 crore and depreciation was lower by 5% to Rs 2.94 crore. Thus the PBT was up by 9% to Rs 137.21 crore.
  • EO income for the quarter and corresponding previous period was nil. The taxation including deferred tax was up by 18% to Rs 49.51 crore in absolute terms and the tax rate stood higher at 36.1% compared to 33.4% in corresponding previous period. And thus the PAT was up by 5% to Rs 87.70 crore.
  • The PPT was nil against a write back of Rs 84.50 crore in corresponding previous period and thus the net profit was eventually lower by 13% to Rs 141.23 crore.

The adoption of the new standard (IND AS 116), on transition, resulted in recognition of Right-of- Use asset (ROU) of Rs. 0.73 Crore and a lease liability by the same amount w1th an adjustment amounting Rs Nil to retained earnings. The effect of this adoption is insignificant on the profit for the period.

Consolidated sales were up by 26% to Rs 1237.36 crore. Higher sales together with 80 bps expansion in OPM powered operating profit up by 38% to Rs 120.08 crore. After accounting for lower other income, lower interest and higher depreciation the PBT was up by 2% to Rs 124.71 crore. After accounting for higher share of profit from JV (up 9% to Rs 8.87 crore) the PBT was up by 2% to Rs 133.58 crore. After accounting for taxation (up 15% to Rs 50.75 crore) the PAT was down by 4% to Rs 82.83 crore. The PPT was Rs 0.01 crore for the quarter compared to nil in corresponding previous period.

Half yearly performance

Sales was up by 37% to Rs 2281.95 crore and the operating profit was up by 370 bps to 10.1%, the operating profit more than doubled to 10.1%. The other income was down by 8% to Rs 139.19 crore. After accounting for higher interest and lower depreciation, the PBT was up by 45% to Rs 352.79 crore. The taxation was higher by 51% to Rs 123.86 crore and thus the PAT was up by 41% to Rs 228.93 crore. The net profit was eventually down by 7% to Rs 228.93 crore on an inflated base on account of a PPT write-back of Rs 84.50 crore in the corresponding previous period.

The consolidated sales was up by 32% to Rs 2307.21 crore and the operating profit was up by 93% to Rs 295.68 crore facilitated by higher sales and 400 bps expansion in OPM to 12.8%. Eventually the net profit was down by 11% to Rs 227.48 crore on an inflated base.

Ircon International: Standalone Financials

 

1909 (3) 1809 (3) Var. (%) 1909 (6) 1809 (6) Var. (%) 1903 (12) 1803 (12) Var (%)
Sales 1161.12 962.29 21 2281.95 1666.42 37 4415.10 3890.64 13
OPM (%) 7.7 6.5 10.1 6.4 8.6 9.7
OP 89.36 62.82 42 229.92 106.23 116 378.01 377.21 0
Other income 56.89 70.27 -19 139.19 151.15 -8 264.44 230.80 15
PBIDT 146.25 133.09 10 369.11 257.38 43 642.45 608.01 6
Interest 6.10 4.50 36 10.65 7.25 47 15.57 64.80 -76
PBDT 140.15 128.59 9 358.46 250.13 43 626.88 543.21 15
Depreciation 2.94 3.10 -5 5.67 6.02 -6 11.94 12.86 -7
PBT before EO 137.21 125.49 9 352.79 244.11 45 614.94 530.35 16
EO Income 0.00 0.00 0.00 0.00 0.00 0.00
PBT 137.21 125.49 9 352.79 244.11 45 614.94 530.35 16
Tax 49.51 41.92 18 123.86 82.29 51 221.39 184.95 20
PAT 87.70 83.57 5 228.93 161.82 41 393.55 345.40 14
PPT 0.00 0.00 0.00 -84.50 -100 -50.89 -42.50 20
Net profit 87.70 83.57 5 228.93 246.32 -7 444.44 387.90 15
EPS (Rs)* # # # # # 41.8 36.7
* EPS on Post issue equity capital of Rs 94.05 crore. Face Value: Rs 10
# EPS is annualised in case of nine month/half/ quarter financials
Figures in Rs crore
Source: Capitaline Corporate Database

Ircon International: Consolidated Financials

 

1909 (3) 1809 (3) Var. (%) 1909 (6) 1809 (6) Var. (%) 1903 (12) 1803 (12) Var (%)
Sales 1237.36 978.67 26 2307.21 1749.51 32 4798.43 4024.22 19
OPM (%) 9.7 8.9 12.8 8.8 10.0 11.0
OP 120.08 87.10 38 295.68 153.53 93 477.68 442.78 8
Other income 30.71 59.03 -48 88.84 122.79 -28 191.18 189.01 1
PBIDT 150.79 146.13 3 384.52 276.32 39 668.86 631.79 6
Interest 6.37 8.89 -28 11.05 11.71 -6 14.53 65.09 -78
PBDT 144.42 137.24 5 373.47 264.61 41 654.33 566.70 15
Depreciation 19.71 14.51 36 39.17 21.06 86 51.85 16.42 216
PBT before share of P/(L) from JV 124.71 122.73 2 334.30 243.55 37 602.48 550.28 9
Share of P/(L) from JV 8.87 8.14 9 18.42 14.63 26 21.54 5.16 317
PBT before EO 133.58 130.87 2 352.72 258.18 37 624.02 555.44 12
EO Income 0.00 0.00 0.00 0.00 0.00 0.00
PBT 133.58 130.87 2 352.72 258.18 37 624.02 555.44 12
Tax 50.75 44.28 15 125.23 85.71 46 225.08 190.15 18
PAT 82.83 86.59 -4 227.49 172.47 32 398.94 365.29 9
PPT 0.01 0.00 0.01 -84.50 -100 -50.89 -43.37 17
Net profit 82.82 86.59 -4 227.48 256.97 -11 449.83 408.66 10
EPS (Rs)* # # # # # 42.4 38.8
* EPS on Post issue equity capital of Rs 94.05 crore. Face Value: Rs 10
# EPS is annualised in case of nine month/half/ quarter financials
Figures in Rs crore
Source: Capitaline Corporate Database

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