High interest costs, flat revenues led to 17% decline Ramky Infra September profits

MUMBAI: In September 2012 quarter, the company's interest costs grew 34% y-o-y on account higher working capital and increased borrowings for its infrastructure projects.

The company's working capital cycle increased from 141 days at the end of FY12 to 196 days presently, which is higher than the industry average of 120-150 days.

At present, the company has 19 BOT projects, out of which three are operational. For these pending projects, the company would have to infuse Rs 1100 crore as equity over the next three years.

However, due to its healthy balance sheet and good number of operational projects, the company would not find it difficult in the capital infusion. In the construction segment on the other hand is not encouraging.

The company secured orders worth Rs 200 crore as compared to Rs 580 crore of orders received in june 2012 quarter. In spite of this, its current order book remains strong at Rs 13200 crore, which are 3.6 times its FY12 revenues.

This order book gives a healthy revenue visibility over the next three years. At current market price of Rs 100, the stock is trading at a price-to-book value of 0.45, which is lower compared to its similar sized peers.