Linde India shares fall over 7% after sharp fall in revenue
The significant growth in bottomline was largely due to sale of south region investment business.
February 25, 2020 / 03:49 PM IST
Shares of industrial gases company Linde India fell 7 percent intraday on February 25 after the company reported a sharp fall in revenue, though operating income and margin remained strong.
The company reported a profit after tax at Rs 634.5 crore in the quarter ended December 2019, against Rs 15.42 crore in the same period last year.
The significant growth in bottom line was largely due to the sale of south region investment business.
In connection with the global merger between Linde AG and Praxair Inc., the Competition Commission of India (CCI) required divestiture of certain assets of Linde India, as a condition to approving the global merger.
Accordingly, south region investment business was divested during the year on a slump-sale and as is where is basis. The total profit on such divestment was Rs 840.75 crore after adjusting for carrying value of the business of Rs 273.92 crore, consent fees for assignment of contract of Rs 250 crore and other related expenditure for sale of the business of Rs 15.32 crore which has been shown as exceptional item, company said in its BSE filing.
But revenue from operations during the quarter fell sharply by 26.6 percent year-on-year to Rs 412.82 crore.
At the operating level, earnings before interest, tax, depreciation and amortisation (EBITDA) increased 17.86 percent to Rs 99.9 crore and margin expanded 914bps to 24.20 percent compared to December quarter 2018, supported by lower finance, power & fuel, freight & transport and other expenses.
The stock was quoting at Rs 714.40, down Rs 56.95, or 7.38 percent on the BSE at 1519 hours IST, but it rallied 63 percent in last one year