ISGEC Heavy Engineering Ltd's Q2FY19 standalone net profit declines 37.39% yoy to Rs28.80cr : Misses Estimates

The company’s standalone revenue stood at Rs1,005.71cr, up 57.33% yoy and 40.82% qoq.

Nov 13, 2018 10:11 IST India Infoline Research Team

ISGEC Heavy Engineering Ltd Q2FY19

Standalone Results Q2FY19: (Rs. in cr)

Q2FY19 YoY (%)
Revenue 1,005.71 57.3
EBITDA 51.55 19.9
EBITDA Margin (%) 5.1 [159]
Net Profit (adjusted) 28.80 [37.4]
***EBITDA margin change is bps
ISGEC Heavy Engineering Limited’s September quarter numbers were a mixed bag as it beat revenue estimates but failed to meet estimated EBITDA and net profit numbers. Revenue from operations jumped 57.3% yoy to Rs1,005.7cr in Q2FY19 vs. Rs639.3cr in Q2FY18, 17.4% above the street estimates. EBITDA for the current quarter increased by 19.9% yoy to Rs51.6cr, 27.3% below the consensus estimates. EBITDA margin contracted by 160bps yoy to 5.1% in Q2FY19. Profit after taxes witnessed a sharp drop of 37.4% yoy to Rs28.8cr for the September quarter of financial year 2019.
  • Gross profit for the quarter increased by 24.2% yoy to Rs302.3cr as against Rs243.5cr for the same quarter last year.
  • Gross profit margin declined from 38.1% in Q2FY18 to 30.1% in Q2FY19, mainly owing to surge in cost of materials (77.7% yoy to Rs703.4cr).
  • Net profit for the quarter dropped due to lower than expected operating numbers coupled with sharp decline in other income (down 67.8% yoy to Rs12.1cr).
  • Other expenses jumped 35% yoy to Rs182.1cr in Q2FY19 vs. Rs134.9cr in Q2FY18.
  • Interest costs also jumped, as it nearly doubled from Rs1.7cr in Q2FY18 to Rs3.3cr for the same period last year.

Technical View:

ISGEC Heavy Engineering Ltd is currently trading at Rs. 5,700, up by 316.1 points or 5.87% from its previous closing of Rs. 5,383.90 on the BSE.
The scrip opened at Rs. 5,465 and has touched a high and low of Rs. 5,797 and Rs. 5,351.15 respectively. So far 2,934 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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