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GMR Infrastructure: A high risk stock with Loss in Q4 Result
In its press release the company stated that the exceptional loss of Rs 937 crore was on account of investments in InterGen.
The acquisition of InterGen, a US based utility company, was done through convertible debentures. This loss was for carrying values of these debentures on GMR's books.
The EBITDA on consolidated basis was at Rs 440 crore. Net sales were at Rs 1,961 crore versus Rs 1,125 crore. The loss before tax was at Rs 53 crore versus PBT of Rs 34 crore.
The depreciation was at Rs 261 crore versus Rs 164 crore and other income was down at Rs 61 crore versus Rs 107 crore.
On this occasion GM Rao, Group Chairman stated: “The progress of implementation of all the projects across all the sectors is on schedule. The operations of all the assets continue to be encouraging. Though the divestment of Intergen has resulted in a one time and non-recurring loss of Rs 939 crore, it has released an equity capital of Rs 958 crore and would enable us to reinforce our focus and resources on more profitable Indian Assets. We would continue to emerge stronger".
The March quarter of the company on standalone basis recorded total sales of Rs 727.4 crore and net profit of Rs 58.88 crore. For the same period it showed that the company's sales on a quarterly basis was Rs 381.59 crore, meanwhile its net profit was Rs 17.11 crore.
GMR Infrastructure reported operating profit margin of 23.3% for the quarter ending on March 2011. This is less than the margin reported in the December-quarter, 38.19%. It is also less than the operating profit margin reported in the March-quarter of the previous year (FY10) at 40.1%.
Meanwhile the net profit margin for the company for the quarter ending on March 31, 2011 at 10.42% is less than that of the previous quarter, December 31, 2010 at 12.04%. But this was more than the net profit margin as reported for the quarter ending March 31, 2010, which was -5.44%.
View: The stocks performance over the last one year has been lagging the benchmark index - Sensex. Though the company's result on one look is not so good. But the company is still winning new projects. Also the promoters of the company have increased their holding in the company from by 0.44% to 71.17%, a good sign, reflecting faith of the promoter in the company. Under the purview of result this is the stock for a high risk investor with a time horizon of 2-3 years for a payoff. Also an evaluation every of the stock every quarter is also important.
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