Feb 15, 2013 08:37 PM IST | Source: CNBC-TV18

May look at equity infusion to sustain profits: Ramky Infra

Ramky Infrastructure came out with their Q3 numbers, sales were up 6.5 percent. At an earnings before interest, taxes, depreciation and amortisation (EBITDA) level it was a slightly lower performance of 11 percent fall to Rs 124 crore.

Ramky Infrastructure posted a lower net profit of Rs 23.26 crore for the third quarter ended December 31, against Rs 53.16 crore for the corresponding period last year.

The Hyderabad-based infrastructure and construction company posted consolidated revenue of Rs 1,025.34 crore (Rs 963.16 crore).
“The key point impacting the margins is the interest cost, which started to go up significantly. There was about Rs 17 crore increase in the finance cost between last year and now and this had started to impact,” M Goutham Reddy, executive director of Ramky Group told CNBC-TV18 in an interview.

In addition to interest cost, Reddy said, there was about 100-150 bps increase in the direct cost that is the raw material cost as a percentage of revenue. This impacted the company’s overall profitability

Also Read: Ramky Infra ties up funds for Agra-Etawah road project

Talking about order inflow, he said, the pace is slow and there is no incremental addition in terms of closing order book. However, he was quick to add that the order book was "adequate" at Rs 12,400 crore.

Moreover, Reddy was not worried on account of revenues. "We are primarily working on sustainability of profitability, which has been declining. It has to be augmented either by equity infusion or by way of reducing direct and indirect cost," he told the channel.

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