White Diamond

Diamond Power Infra is engaged in manufacturing of power cables and transmission towers. It posted a 11% (yoY) rise in consolidated net profit at Rs.40 crore on a 11% rise in net sales at Rs.89 crore. The market is especially enthused by the fact that its net profit for first half is already at Rs.77 crore, which is 70% of FY14 net profit thus holding the promise of a much higher current fiscal, with two more quarters to go.

In terms of segment wise performance, the company has five segments – power cables (contributes 50% to topline), Towers (20% to topline), Conductors (16%), Transformers (10%) and Power Infrastructure (4%). This quarter, power cables, conductors and transformers showed a decline in EBIT and the show was really saved by Towers segment, which made up for the others and posted a 75% (YoY) rise in EBIT. The company’s interest outgo is pretty steep at Rs.29 crore every quarter and this eats aways over 3% of the topline. The power sector is expected to swing back in H2 and once that happens, this company could stand to gain. As such, it is expected to surpass FY14 bottomline,one has to see by how much….