For 2Q FY 2012, HCC’s numbers came much lower than our and street
expectations. On the top-line front, HCC’s revenue declined by 6.3% yoy to
Rs.828.6 cr (Rs.884.6 cr), against our estimate of Rs.946.5cr, due to slowdown in
execution.
EBITDAM came in at 11.3% (12.8%), a dip of 0.15% yoy and lower
than our estimate of 13.2%, on account of commodity price pressures and fixed
overheads not covered by lower revenue. On the earnings front, HCC reported a
loss of Rs.40.5 cr VS. profit of Rs.12.1cr in 2Q FY 2011, against our estimate of loss of
Rs.7.4 cr. Shocking performance on the bottom-line front was due to lower revenue
and EBITDA margin and higher interest cost (Rs.107.4 cr, growth of 60.2% yoy).
Owing to the uncertainties surrounding Lavasa project and other concerns such as
subdued order inflow, deteriorating working capital situation and high interest
cost, we continue to maintain our Neutral view on the stock.
Review by Angle Broking
expectations. On the top-line front, HCC’s revenue declined by 6.3% yoy to
Rs.828.6 cr (Rs.884.6 cr), against our estimate of Rs.946.5cr, due to slowdown in
execution.
EBITDAM came in at 11.3% (12.8%), a dip of 0.15% yoy and lower
than our estimate of 13.2%, on account of commodity price pressures and fixed
overheads not covered by lower revenue. On the earnings front, HCC reported a
loss of Rs.40.5 cr VS. profit of Rs.12.1cr in 2Q FY 2011, against our estimate of loss of
Rs.7.4 cr. Shocking performance on the bottom-line front was due to lower revenue
and EBITDA margin and higher interest cost (Rs.107.4 cr, growth of 60.2% yoy).
Owing to the uncertainties surrounding Lavasa project and other concerns such as
subdued order inflow, deteriorating working capital situation and high interest
cost, we continue to maintain our Neutral view on the stock.
Review by Angle Broking
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