Shares of NLC India fell around 5% in early trade on Monday after the state-run power and mining company reported a sharp drop in June-quarter net profit. The stock had rallied more than 400% over the past five years before the earnings announcement.
At around 10:44 am, the stock was trading at Rs 290.15 on the NSE, down from its previous close of Rs 304.40.
While revenue and operating profit improved during the quarter, the sharp fall in net profit appeared to weigh on investor sentiment.
NLC India Q1 Profit Falls 39%
NLC India reported consolidated net profit of Rs 484 crore for the June quarter, down 39% from Rs 798 crore in the year-ago quarter.
The decline in profit came even as the company delivered strong growth in revenue. Consolidated revenue from operations increased 23% year-on-year to Rs 4,717 crore from Rs 3,826 crore a year ago.
The divergence between revenue and profit was a key concern for investors, particularly because the previous-year quarter had benefited from exceptional or non-operating gains.
Also Read: NLC India Q1 Results: Profit Slumps 40% Even As Margin Expands; Revenue Tops Rs 4,700 Crore
Ebitda Jumps 57%, Margin Expands
NLC India's operating performance, however, remained strong during the quarter. Ebitda increased 57.4% year-on-year to Rs 1,471 crore from Rs 935 crore.
The Ebitda margin also improved sharply to 31.2% from 24.4% a year earlier, pointing to stronger operating profitability and improved business performance.
However, the substantial improvement at the operating level failed to translate into higher net profit. The sharp year-on-year decline in the bottom line suggests that the strong operating growth was more than offset by the absence of gains recorded in the corresponding quarter last year and other below-operating-line factors.
407% Gains in Five Year
Despite today's fall, the stock is up over 407% in the past five years, and around 24.9% in the past year.
However, the stock has been under pressure for a month now, as during the period, the stock shed close to 8%.
Currently, the stock is trading at a price-to-earnings multiple of 12.54 times, with a market cap of Rs 40,344.19 crore as at the end of the preceding session.
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