NCC

The company, earlier recognized as Nagarjuna Construction Company and now rechristened as NCC, has shown a poor performance in Q2 with a YoY 44% drop in consolidated net profit. And now in Q3, consolidated net profit has come in at Rs.12.39 crore, up 9% QoQ and YoY, it is a turnaround from a net loss of Rs.10.32 crore. So a bit better than Q2. Its interest cost remains high; it came in at Rs.143.50 crore in current Q3, which is 9.4% of net sales though this is a tad lower than outgo at Rs.151.44 crore in Q2. For 9MFY13, it stands at Rs.436 crore. In Q3, it brought down debt by Rs.150 crore and it currently stands at Rs.2500 crore. The company has earlier planned to bring down the debt to Rs.2000 crore by end of FY13 but monetization through sale of assets has not happened as per plans and in Q4, it expects just another Rs.100 crore to come off the debt. Thus burden of high interest costs will continue for some more time, affecting the net profit and NOM which is around 1%. Once the interest rate cycle starts coming down, the company will stand to benefit.

Its order book  as at 30th Sept 2012 stood at Rs.19,639 crore and at end of Q3FY13, it was at Rs.18799 crore, down 4% sequentially. As at end of Q3, promoter’s stake was at 20.35% of which 56.27% is pledged. Institutional holding is much more than double the promoter’s stake at 50.42% of which Blackstone holds 9.9% and Warhol holds 9.89%. RakeshJhunjhunwala, at end of Q3FY13 holds 8.19% stake.