Shares of GMR Infrastructure Ltd. jumped as much as 27.4 percent, the most since May 2009, after it reported a pre-tax profit and its debt halved in the financial year 2016-17.
Gross debt fell to Rs 19,856 crore from Rs 37,480 crore in the year-ended March 2016, according to the media statement. Net debt to earnings before interest, taxes, depreciation and amortisation improved to 4.3 from 10.2 in the previous year.
The company reported a profit before tax of Rs 752 crore compared to a loss of Rs 2,475 crore, while the net loss narrowed to Rs 575 crore from Rs 2,713 crore in the previous financial year. This was much lower than the Rs 744.8 crore consensus of analysts tracked by Bloomberg.
- Consolidated revenue rose 3 percent to Rs 10,999 crore.
- EBITDA increased 12.3 percent to Rs 3,497 crore driven by the performance of the airports and the energy businesses.
- Profitability margin expanded 400 basis points to 42 percent.
Strategic debt restructuring efforts, stake sales, and arbitration awards helped reduce the firm's debt burden.
Resolution Of Stressed Assets
- Chhattisgarh power project: Rs 2,992 crore debt was converted into 52 percent equity through strategic debt restructuring.
- Rajahmundry project (Andhra Pradesh): Rs 1,414 crore debt converted into 55 percent equity.
Other Factors
- GMR received $270 million, roughly amounting to Rs 1,800 crore, as the arbitration award for the wrongful termination of the Male airport contract in Maldives.
- Tenaga Nasional Berhad, Malaysia invested $300 million (around 2,000 crore) in GMR Energy Ltd. for 30 percent equity stake.
March Quarter Net Loss Widens
Net loss in the January-March quarter widened to Rs 2,479 crore compared to Rs 1,787 crore, partly due to a Rs 2,357 crore one-time provisioning for the fall in value of investments and advances.
- Revenue from operations rose 57.5 percent to Rs 177 crore
- Fall in income from investments and dividends led to a 31 percent decline in total income to Rs 271.6 crore.
- Expenses grew nearly 35 percent, contributing to the weak financial performance.
- EBITDA dropped 78 percent to Rs 60.5 crore
- Profitability margins slumped to 22.3 percent from 70.9 percent.
Mid-Sized Infrastructure Firms Rally
The up move in GMR shares triggered rally in mid and small cap infrastructure stocks.
Some of Key Movers
- GMR Infra (+24.7%)
- GVK Power & Infrastructure (+11.5%)
- Gammon Infrastructure (+18%)
- Gammon India (8.6%)
- HCC (+7%)
- Punj Lloyd (+6.6%)
- Lanco Infrastructure (10%)
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