Bharati Shipyard locked in 5% UC
Shares of Bharati Shipyard are up by Rs. 1.15 and locked in 5% upper circuit on both NSE and BSE, with circuit limit of Rs. 24.50 and Rs. 24.85 per share respectively. Although frozen in upper circuit, volumes have been very thin. Combined volumes on both the exchanges have been less than 5,700 shares.
This debt-laden shipbuilder has announced quarterly financial results for 3 months ended 30th June 2014. While revenues have risen from Rs. 13 crore to Rs. 17 crore QoQ, what is spelling optimism is reduction in operating losses from EBITDA of negative Rs. 36 crore in the March quarter, EBITDA for June quarter has reduced to negative Rs. 20 crore. However, interest cost continues to remain high, at Rs. 146 crore for the quarter ended 30-06-14. Thus, it clocked net loss of Rs. 180 crore for Q1FY15, as against Rs. 842 crore net loss for FY14, on standalone basis.
Company is mounted with debt to the tune of about Rs. 4,250 crore, as of 31st March 2014, much of which is with Edelweiss ARC. Its current market cap is a paltry Rs. 125 crore. Till the debt is not restructured, the low market capitalization is not attractive, as shipbuilding industry is facing a crunch both domestically and globally. Hence, the results can only bring temporary cheer.