IRB Infrastructure’s consolidated net profit grew by 8.6 percent year-on-year, beating analysts' expectations, to Rs 142.7 crore in the third quarter of financial year 2012-13 despite increase in finance and depreciation cost.
Consolidated net sales too came in higher than forecast, rising by 22.5 percent to Rs 913.8 crore from Rs 745.8 crore during the same period. Revenues growth attributed to sound execution of construction projects.
VD Mhaiskar, CMD, IRB Infrastructure said revenues for Q3 have been robust on back of sound execution of projects on the construction side and also because of higher toll collections.
Higher depreciation and higher interest costs were due to commissioning of new projects, he explained.
He further added, “We have a comfortable order book of Rs 9,100 crore. and our gross debt would be close to Rs 7,500 crore.
We expect two key projects that is the Jaipur-Tonk-Deoli and Talegaon-Amravati to be operational before end of March, he asserted.
Below is the edited transcript of his interview on CNBC-TV18
Q: Take us through why the earnings have surprised the street, what is the toll revenue per day and other details of the revenues?
A: The revenues have been robust and total revenue has risen to Rs 947 crore. Primarily it is because of sound execution on the construction side where the revenues have jumped by 29 percent and also because of higher toll collections by around 10 percent over the last year. The EBITDA also has been strong at around 26 percent on the construction side.
Q: Two parameters which have increased on a year-on-year (YoY) basis is your depreciation as well as your interest cost, can you throw some light with regards to why exactly these two parameters have increased significantly? Is it because of commissioning or maybe execution of certain projects and is this aberration or do we expect this to continue as a trend?
A: You will remember that Surat-Dahisar project became operational around same time last year. This is the first year when the amortization for the full year of Surat-Dahisar now comes in. Because of that operationalisation of Surat-Dahisar, you see higher number on the amortization side.
Subsequently, the interest on the projects, where the debt has been now drawn like Jaipur-Tonk-Deoli and Talegaon-Amravati. These projects are now nearing completion. Most of the debt on those projects has been drawn, so naturally the interest there also has gone up.
Q: What is the relief from service tax?
A: There has been some positive news on that count. On all these 10 special purpose vehicles (SPVs) where we had received a demand from the service tax authorities; we had applied to the appellate tribunal and unconditional waiver has been given on that from pre-deposit and orders accordingly have been issued.
Q: Is there an amount that you can tell us because your tax outgo is lower, so what is the service tax related relief?
A: Service tax was never applicable on these services and that is how we had viewed it all the time.We had applied to the tribunal and in all the 10 SPVs, we have got an unconditional waiver.
Q: Can you break up the order book for us at Rs 9,100 crore, what does it comprise of in terms of construction vis-à-vis engineering, procurement and construction (EPC) and what is the project visibility?
A: We have a comfortable order book of Rs 9,100 crore. It consists of Rs 7,100 crore of EPC that is to be executed over next three years. It comprises of the Ahmedabad-Vadodara project, the Goa-Kundapur project and the balanced cost, which has not yet built for the ongoing projects where construction is in advance stage.
Q: What does your gross debt stand at for this quarter?
A: Gross debt would be close to Rs 7,500 crore.
Q: What is the commissioning time table, anything in FY14 or even this quarter?
A: We expect that Jaipur-Tonk-Deoli and Talegaon-Amravati projects should become operational before end of March.