Mumbai: IRB Infrastructure Developers Ltd on Monday reported a 30.9% jump in net profit to Rs237.9 crore in the quarter ended June 2017, as compared to the same quarter last year on the back of a 19.7% rise in revenue to Rs1,816.9 crore and a 73.7% jump in other income to Rs53.5 crore. 

At an earnings before interest, taxes, depreciation and amortization (Ebitda) level, however, the company disappointed with a growth of just 5.7% compared to the year-ago period to Rs817.9 crore. Consequently, its Ebitda margin fell by 600 basis points (bps) to 45%. One bps is a hundredth of a percentage point. 

The main reason for such a huge drop in IRB’s Ebitda margin during the quarter was a close to 800 bps rise in contract and site expenses to 44.4% of the revenue. In the quarter ended June 2016, the same was just 36.4% of the revenue. 

Interestingly, despite IRB Infra’s interest expense during the quarter falling by 13% from the year-ago period and, consequently, interest coverage ratio rising to 2.86 from 2.35, the company’s board approved a special resolution for consideration by its shareholders that in case of a default, its lenders shall have the enabling right of conversion of debt into equity as per the Reserve Bank of India’s (RBI’s) strategic debt restructuring (SDR). 

“It is clarified that the company has been regular in paying interest and principal instalments of all of its loans and the company shall continue the same in timely manner in future as well, the special resolution is just an enabling resolution and is not for any immediate action but only for complying with lender(s) sanction terms. There are absolutely no proposals for conversion of any loan into equity, either pending or envisaged," IRB Infra clarified.

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