Pratibha Industries, a company focused on water projects, has posted strong 43% growth in sales while it is aiming to diversify further
Pratibha Industries, a mid-cap infrastructure and EPC company, has reported strong earnings result for the quarter ended 30 September 2012. The company saw its sales grow 43% year-on-year (y-o-y), from Rs290.97 crore to Rs416.91 crore. Its net profit grew by 44% y-o-y to Rs23.63 crore, mainly helped by lower finance costs and higher other income.
The Moneylife database revealed that its quarterly y-o-y sales growth of 43% nearly matched its three-quarter average growth rate of 47%, which is impressive considering the benign infrastructure sector over the last few quarters. Sales growth in the last three quarters has been over 40%—which is a sign of consistency. However, its manufacturing expenses have risen by 41% when compared to the same period last year. This caused the operating profit to grow at a slower pace when compared to its three-quarter y-o-y average of 32%. This is particularly due to rising commodity prices and inflation which has pushed up manufacturing expenses. The company commands a moderate return of networth at 18%. Despite this, valuations remain attractive, with its market capitalisation hovering nearly three times its operating profit.
Shareholding of foreign institutional investors (FIIs) declined marginally, from 15.73% of the total shares outstanding to 15.63%. On the other hand, domestic institutional investors (DIIs) hiked their stake from 5.17% to 5.55%.
The company is mainly focused on water irrigation projects, especially in Maharashtra. It also provides urban infrastructure and construction of buildings. As of FY12 end, its order book stood at nearly Rs5,800 crore, with over 50% of the order book pertaining to water projects. It aims to diversify further to reduce its reliance on water projects. For instance, last year it bagged a real estate project in valued at valued at Rs362 crore from Runwal Homes Pvt Ltd for the civil and structural work of a residential building “Runwal Greens” located at a Mumbai suburb.
The stock ended the day at Rs54.05, or down 0.92% today, on the Bombay Stock Exchange (BSE).
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