NLC India Ltd. reported a decline in consolidated net profit for the quarter ended June even as revenue and operating performance improved sharply, indicating that higher operational earnings were offset by the absence of one-off gains recorded in the year-ago period.
The state-run mining and power company posted a consolidated net profit of Rs 484 crore for the first quarter, down 39% from Rs 798 crore a year earlier, according to an exchange filing on Friday.
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Revenue from operations rose 23% year-on-year to Rs 4,717 crore from Rs 3,826 crore, supported by improved performance across its businesses.
Operating earnings were significantly stronger during the quarter. Earnings before interest, tax, depreciation and amortisation increased 57.4% year-on-year to Rs 1,471 crore from Rs 935 crore in the corresponding period last year.
The company's Ebitda margin expanded to 31.2% from 24.4% a year earlier, reflecting improved operating efficiencies and a favourable business mix.
Despite the robust operating performance, the decline in bottom line profit suggests the base quarter had benefited from exceptional or non-operating items, while higher depreciation, finance costs or tax expenses may also have weighed on earnings.
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Investors are likely to focus on management's commentary regarding power demand, coal production, renewable energy capacity additions and the earnings outlook for the remainder of the financial year, given the sharp improvement in operating profitability despite weaker reported net profit.
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