Infrastructure and construction company NCC is likely to report standalone net profit of Rs 22 crore in June quarter against loss of Rs 3 crore in the year-ago period, according to average of estimates of analysts polled by CNBC-TV18. Lower interest cost and higher EBITDA may help boost profit.
Total income from operations is seen rising 16.2 percent to Rs 1,731 crore from Rs 1,490 crore during the same period, led by execution in buildings and in-house power project. Even the low base in year-ago period may boost revenue.
However, some analysts feel the execution at power plant may be muted, which could subdue revenue.
NCC is expected to report strong operational performance along with lower interest expense and its margin may expand due to higher share of new orders won at better margins.
Operating profit (earnings before interest, tax, depreciation and amortisation) may increase 28.8 percent to Rs 140 crore and margin may expand 80 basis points to 8.1 percent in the quarter gone by.
Interest expenses are likely to reduce significantly (especially on a sequential basis) on the back of debt reduction following the company’s Rs 600 crore rights issue in Q2FY15.
Analysts expect order inflows to improve after subdued inflows in Q4FY15, even though the company has not announced any orders during the quarter. Some analysts expect order inflows at around Rs 1,200 crore.
Key factors to watch out for are its ability to main strong execution, expansion in EBITDA margin and performance on working capital.
Analysts expect the trend of strong margins to continue even in FY16 as the company is confident of reaching EBITDA margin of 8.5 percent in FY16. Its debt-to-equity ratio stood at 0.7 times as it has managed to significantly bring down its overall debt. As per standalone balance sheet as on March 2015, debt stood at Rs 2,200 crore.
After its Q4FY15 earnings, the management guided for order intake of Rs 10,000 crore, of which 60 percent is likely to come from buildings and water segment. Total order inflow for FY15 stood at Rs 7,381 crore, down by 17.4 percent.
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