Electrosteel Castings posts 47.3% decline in Q2 net to Rs 19.5 crore

KOLKATA: Electrosteel Castings, a leading manufacturer of ductile iron pipes used in water transportation posted a 47.3% decline in net profit to Rs 19.49 crore for the quarter ended September 30, 2013 compared to Rs 370.03 in same period last year on higher raw material and interest costs.

The company's net revenue for the quarter grew 14.8% to, Rs 566.97 crore, while revenues for the half year stood at Rs 1059.18 crore, showing a 12.6% increase over the corresponding period last year. For the half year ended September 30, 2013 Electrosteel Castings posted a net profit of Rs 20.04 crore as against a net profit of Rs 19.71 crore for the corresponding period ended September 30, 2012.

Earnings before interest, taxes, depreciation and amortization (EBITDA) for the half year stood at Rs 110.10 crore against Rs 92.66 crore during the corresponding period last year, thus registering a growth of 18.82%.

Profit before tax for the half year stood at Rs 22.67 crore against Rs 17.51 crore during the corresponding period last year, thus registering a growth of 29.47%.

Electrosteel Castings also informed BSE that its board of directors has decided to issue upto 1,70,64,617 equity shares of the company at a price of Rs. 13.85 (including a premium of Rs. 12.85) per equity share aggregating upto Rs. 23.63 crore to the promoters on a preferential basis.

The issuance of the securities shall however be subject to the approval of the shareholders of Electrosteel Castings at the General Meeting and also in terms of the provisions of the SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2009. For this purpose an Extraordinary General Meeting has been convened on November 23, 2013.

Commenting on the preference issue, Bhavesh Chauhan, senior research analyst (metals & mining) at Angel Broking said: “In our view, this preference issue has been undertaken to improve ECL’s debt equity position which in turn will enable it to raise additional debt. The additional funds are likely to be deployed to fund expansion activities at its associate, Electrosteel Steels, where ECL holds 39.6% stake.”