HCC Q4 PAT seen up 2.68 times at Rs 29 cr

Hindustan Construction Company (HCC) is expected to post 2.68 times growth in fourth quarter FY11 net profit of Rs 29 crore as against Rs 8 crore in third quarter while profit is likely to fall by 32% on year-on-year basis.

Total income is seen going up by 19% at Rs 1,289 crore on quarter-on-quarter basis and 28% growth as compared to Rs 1009 crore on year-on-year basis.

Earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to go up by 22% to Rs 161 crore on YoY basis and seen up by 56% as compared to Rs 123 crore on QoQ basis.

Operating profit margin is likely to be at 12% in January-March quarter 2011 versus 13% in same quarter the previous year and 9% in quarter ended December 2010.

For financial year 2010-11, HCC is expected to report 15% growth in total income of Rs 4,177 crore as against Rs 3,629 crore in previous year.

EBITDA is likely to grow by 29% to Rs 552 crore from Rs 428 crore and operating profit margin is seen improving at 13% versus 12%.

Profit after tax is likely to go down by 5% at Rs 78 crore from Rs 81 crore.

QoQ results are ideally not comparable since Q4 is usually stronger for construction companies.

Factors to watch

-Execution on the Andhra irrigation project will be a key monitorable for the co
-Ability to improve execution and manage the stretched working capital cycle needs to be watched
-Also capacity to manage interest costs amidst rising interest rates will be under scanner
-Company is expected to report stronger revenues on account of improved execution
-Company