Mumbai: Hindustan Construction Co Ltd reported on Friday a sharp 47.4% drop in quarterly net profit, hurt by high interest costs and a slowdown in infrastructure expenditure and delays in getting clearances.
“It has been a very difficult year as far as HCC is concerned. There has been a slowdown in infrastructure expenditure by the government, many decisions have been delayed due to (lack of) environmental clearance,” chairman and managing director Ajit Gulabchand said.
In addition there has been a slowdown in investments by private infrastructure players as well, he said.
The firm posted a net profit of Rs 22.607 crore in the January-March quarter compared with Rs 42.970 crore a year ago. Quarterly net sales stood at Rs 1,209 crore versus 1,092 crore last year, HCC said in a statement.
“The results were pretty much in line with expectations,” said Vibhor Singhal, an analyst with Alchemy Share & Stock Brokers.
“People had anticipated that their interest costs would be very high and that would eat away into their Ebitda and that is what happened,” Singhal said.
HCC’s interest costs doubled to Rs 90.277 crore from Rs 44.297 crore a year ago.
At 2:33 p.m., HCC’s shares were down 1.53% at Rs 35.3 in a weak Mumbai market.
The company’s orderbook as on 31 March stands at Rs 18,127 crore, it said.
Hindustan Construction’s unit township developer Lavasa Corp had hopes of launching a $436 million IPO but there has been no progress following its failure to get environmental clearance for a hill station project for Pune.
Lavasa’s performance has been hurt by environment ministry’s order to stop work, HCC said. Lavasa reported a lower net profit of Rs 112 crore for FY11 as against Rs 140 crore during the previous fiscal.
Gulabchand said the company expects the issue to be resolved shortly as it is awaiting environmental clearances.
Another subsidiary HCC Infrastructure has an asset portfolio of Rs 550 crore including six NHAI road concessions, it said in the statement.