Ramky Infr at new low

Ramky Infra has hit a new low today at Rs.33.50 and it remains at the same levels. Volumes are low, at just over 200 shares v/s two weeks average of around 7500 shares.

The stock is down on two counts. Firstly, the poor Q1FY14 numbers wherein the company posted a net loss of Rs.34 crore v/s net profit of Rs.51 crore in nQ1FY13. The company has explained that the loss was mainly on account of incremental provisions made as a matter of abundant caution on its currently perceived risks in relation to certain long outstanding/ non-moving receivables including retention money and amounts with held by the customers, advances to suppliers and sub-contractors, project inventory and project work-in-progress aggregating Rs.55 crore.

The second news affecting the stock was the Crisil downgrade. The rating agency downgraded ratings on the bank facilities of Ramky to 'CRISIL D' from 'CRISIL BB/Negative/CRISIL A4+'. The rating downgrade reflects recent delay by the Ramky group in meeting its repayment obligation, the rating agency said. The delay has been caused by the group's weak liquidity, mainly on account of sustained lengthening of its working capital cycle. The rating agency has said that it expects the group’s working capital to remain stretched in the near term, due to large number of projects under implementation, and decline in mobilization advances due to decreasing order book.