ISGEC Heavy Engineering Ltd. Q3FY18
Standalone Results Q3FY18: (Rs. in crore)
|EBITDA Margin (%)||8.14|||
|Net Profit (adjusted)||29.44||[35.6]|
ISGEC Heavy Engineering’s Q3FY18 results were disappointing on sales as well as operational fronts. Its Q3FY18 sales decreased by 10.9% yoy to Rs662.8cr from Rs744.3cr (not adjusted for excise duty and hence not strictly comparable) in Q3FY17. EBITDA declined by 23.2% yoy to Rs53.9cr from Rs70.2cr in Q3FY17. Thus, EBITDA margin dropped by 130bps yoy from 9.4% in Q3FY17 to 8.1% in Q3FY18. Net profit during the quarter dropped by 35.6% yoy to Rs29.4cr vs. Rs45.7cr in Q3FY17.
• Raw material cost as a proportion to sales has increased from 59.7% in Q3FY17 to 61.6% in Q3FY18. This might be a result of cost over run in the bio refinery project being executed in Philippines.
• Other expenses and employee cost have decreased by 17.5% yoy and 1.4% yoy respectively.
• Finance cost has halved to Rs1.6cr (vs. Rs3.9cr) during the quarter, while other income has declined by 59.6% yoy to Rs7.5cr.
• Poor operating performance and decline in other income resulted in net profit decline.
• In notes to accounts, the company has stated that its bio-refinery project in Philippines has faced cost over runs and delays in completion. The company had notified the client that these risks are to be borne by the latter. The client despite agreeing to the terms earlier, invoked a bank guarantee of Rs130cr on January 30, 2018 and terminated the contract and also claimed damages. The company has filed a petition for stay of the bank guarantee in the Punjab and Haryana court and the next hearing is scheduled for today February 14, 2018.
ISGEC Heavy Engineering Ltd is currently trading at Rs. 7,920, up by 183.75 points or 2.38% from its previous closing of Rs. 7,736.25 on the BSE.
The scrip opened at Rs. 7,800 and has touched a high and low of Rs. 7,945 and Rs. 7,300.05 respectively. So far 3,064(NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.