Sadbhav Q1 profit seen up 20%, execution may drive topline

Sadbhav Engineering's first quarter standalone profit after tax may jump 19.9 percent year-on-year to Rs 32.4 crore and revenue, too, is likely to increase 19.9 percent to Rs 822 crore, according to average of estimates of analysts polled by CNBC-TV18.

Operating profit growth and better interest & depreciation coverage may support bottomline. Analysts expect a Y-o-Y improvement in the BOT segment's profitability due to better traffic growth and higher tariffs in key stretches.

Strong execution may lead to almost 20 percent revenue growth. Execution at company’s in-house BOT projects like --- Bhilwara, Rohtak-Hisar and the Chindwara project will be keenly watched.

Operating profit in June quarter is seen rising 19.3 percent to Rs 85.3 crore but margin may remain flat at 10.4 percent compared to same quarter last year.

Margin could surprise on the upside. The reason for flat operating profit margin is because lower bitumen & diesel costs (favourable for the company) may be offset by higher employee expenses. Jain Irrigation announced 3 orders aggregating to Rs 1,100 crore during the quarter from the roads EPC segment (2 NHAI, 1 PWD).

Key factors to watch out for-Traction on execution-Traction in EPC revenues-Improvement in operating margins-Growth in toll collection on BOT road projects (toll trends)-Outlook on mining segment