HCC likely to post Q4 net loss at Rs 39cr

Mumbai-based construction company HCC is set to declare its fourth quarter (January-March) results on Friday. According to CNBC-TV18 poll, their profitability will continue to remain under stress due to stretched working capital cycle, client side delays and high leverage.

The company is expected to report a net loss of Rs 39 crore on standalone basis as against loss of Rs 54 crore a year ago period and Rs 39 crore in previous quarter. Standalone total income is likely to increase 1 percent year-on-year and 15 percent quarter-on-quarter to Rs 1,168 crore in March quarter. Also Read - 4 reasons why JP Morgan downgraded Siemens to underweight Earnings before interest, tax, depreciation and amortisation (EBITDA) are seen going up by 34.7 percent Y-o-Y and 9.2 percent Q-o-Q to Rs 118 crore during the quarter. EBITDA margin is expected to rise 250 basis points Y-o-Y to 10.1 percent in fourth quarter, but on Q-o-Q basis it may go down by 60 basis points. Company's performance on the top line front has been weak as various project specific and other regulatory issues have hurt revenue growth. Hence, the company is expected to report almost flat revenue growth in Q4 on Y-o-Y basis. However, order inflow of Rs 433 crore in fourth quarter is expected to result in 15 percent improvement in revenues on Q-o-Q basis. Execution is expected to remain muted. Infact, analysts expect HCC to lag behind in project execution. Key parameters to monitor - Need to monitor any improvement in the working capital cycle - Management commentary & outlook on execution and working capital position will be key