HCC in the red

HCC posted a poor set of numbers for Q1FY18 – its net profit for the quarter rose 33% (YoY) at Rs.14.5 crore, though its total revenue fell 5% at Rs.991 crore. This jump in net profit was possible only on account of a drop of 5% in  total expenses.

Though the company talks about a good order intake -  order book of Rs 20,363 crore, getting two new orders worth Rs 1,012 crore, the market remains perturbed about its debt.

The company’s standalone debt stands at Rs 4,100 crore and the company expects it to come down by nearly a fourth this year. That will be largely on the back of arbitration awards worth about Rs 1,000 crore in the next two quarters.  In fact HCC Concessions received an arbitration award of Rs 448 crore for delays on account of the NHAI for the Baharampore Farakka Highways Ltd (BFHL) project on July 21. This apart, HCC is in receipt of letters from government agencies for release of Rs 1,882 crore, of which Rs 839 crore has already been received.

The stock price has tanked today to almost 4% at Rs.39.20 and is amongst the top losers of the day on the BSE.