R-Infra December quarter profit declines 38% to `450.45 crore3 min read . Updated: 06 Feb 2014, 11:53 PM IST
R-Infra posts 26.4% decline in revenue for the same period at `3,896.26 crore
Mumbai: Reliance Infrastructure Ltd (R-Infra), the infrastructure arm of the Anil Ambani-led Reliance Group, posted a 38.11% year-on-year decline in net profit for the quarter ended 31 December to ₹ 450.45 crore.
Without taking this exceptional income into account, R-Infra’s net profit in the third quarter of the current fiscal is around 26% higher than the year-ago quarter, according to a company statement issued after market hours.
The year-on-year growth in profit, when not factoring in the exceptional item from a year ago, came despite a 26.42% decline in operating revenues during the same period to ₹ 3,896.26 crore.
R-Infra’s reported revenue fell well short of a Bloomberg poll, which estimated revenue of ₹ 5,043.6 crore and net profit at ₹ 422.60 crore.
The company saw a decline in electricity sales, EPC (engineering, procurement and construction) work and the infrastructure business that includes construction and operation of road projects.
According to Rupa Shah, analyst at Prabhudas Lilladher Pvt. Ltd, the firm’s profitability was higher year-on-year despite this because of the higher profitability that the company enjoyed across businesses like electricity sales and EPC work.
“The company saw margins improve across key businesses like electricity sales by as much as 100 basis points over the year earlier, and also in the EPC business," Shah said.
Explaining the reasons for better margins in these businesses, Shah said that in its Mumbai electricity distribution business R-Infra was now charging more from other operators who were using its network to supply power to their consumers.
Even in the EPC segment, R-Infra booked higher margins because construction on projects such as Reliance Power’s ultra mega power plant in Sasan, Madhya Pradesh, and some roads, are in their final stages. EPC contractors typically account for higher margins from a project they are executing during its final stages, explained Shah.
The company, which announced its earnings after market hours, saw its share price gain 0.54% on the BSE on Thursday to close at ₹ 361.60 per share. The bourse’s benchmark index, Sensex, gained 0.25% to close at 20,310.74 points.
R-Infra also said in its statement that its Mumbai metro rail project was “in advanced stages" and would start operations within fiscal 2014. The civil work on the metro line in Mumbai (comprising 12km and 12 stations) has been completed along with signal testing and system integration process, said the company.
The 12km line linking the eastern and western suburbs of Mumbai will give residents a public transport alternative to congested roads and packed suburban commuter trains, that offer little by way of passenger comfort and only run in a north-south direction, along the length of the island and its suburbs.
The corridor is being developed by Mumbai Metro One Pvt. Ltd, a consortium led by Reliance Infrastructure, which holds a 69% stake. The other stakeholders in the ₹ 23,500 crore project are Mumbai Metropolitan Region Development Authority, or MMRDA (26%) and Veolia Transport, France (5%).
Reliance Power, another group company of the Anil Ambani-led Reliance Group, also announced its December quarter earnings on Thursday.
The firm posted a net profit of ₹ 267.22 crore for the October-December period, almost the same as a year earlier. R-Power’s revenue was down 6% year-on-year at ₹ 1,463.85 crore over the same period.
R-Power’s shares gained 1.22% on the BSE on Thursday to close at ₹ 62.10 per share.
The company’s reported revenue and net profit were marginally ahead of the Bloomberg poll that estimated turnover at ₹ 1,338 crore and net profit at ₹ 242 crore.
As in earlier quarters, the firm’s only thermal power generating plant in Rosa, Uttar Pradesh, was the main contributor to its revenue and profitability.