IRB Infra Q3 beats estimates, profit up 28% despite weak margin

Moneycontrol Bureau

Mumbai-based road developer IRB Infrastructure's third quarter earnings surpassed analysts' expectations on Friday with profit growing a whopping 27.9 percent year-on-year to Rs 169.6 crore, driven by strong revenue growth despite weak operating profit margin.

Revenue increased by 38.3 percent to Rs 1,333 crore in quarter ended December 2015 compared to Rs 963.83 crore in year-ago period.

Operating profit (earnings before interest, tax, depreciation and amortisation) in Q3 jumped 23.9 percent to Rs 687.5 crore but margin contracted by 610 basis points to 51.5 percent compared to same quarter last fiscal.

According to analysts polled by CNBC-TV18, profit was expected at Rs 151 crore on revenue of Rs 1,236 crore with operating profit growth of 18.5 percent year-on-year. Only margin came in lower than analysts' forecast of 53.3 percent.

Margin was hit by depreciation and employee cost. Depreciation & amortisation and employee expenses surged more than 26 percent each to Rs 226 crore and Rs 570 crore YoY, respectively.

Finance cost during the quarter increased 11.2 percent year-on-year to Rs 263.8 crore and tax expenses rose 72.4 percent to Rs 60.7 crore in quarter gone by.

IRB Infra said construction order book stood at approximately Rs 15,500 crore, which gave good revenue visibility to the company for coming years.

At 14:21 hours IST, the scrip of IRB Infrastructure Developers was quoting at Rs 245.95, up Rs 11.25, or 4.79 percent on the BSE.