Wabag net profit slips despite a 34% revenue jump

CHENNAI: Water infrastructure mangement company Va Tech Wabag posted a marginal decline in second quarter consolidated net profit, as higher expenses offset a 34% rise in revenue.

The company also said that its international business, which accounts for half its revenues, has broken even in the second quarter, news about which the Street was keenly awaiting.

Rajiv Mittal, managing director of Wabag, announced in a press statement that the international business has achieved the breakeven at the PAT level.

The Chennai-based company made Rs 174.2 crore in net profits, slipping slightly from the same quarter last year. Net sales rose by more than a third to over Rs 464 crore.

In a note prior to the results, brokerages such as Ambit Capital had expected a far lower revenue growth (of 20%) and a net profit growth (of 5%).

At the consolidated level, the company’s total expenses shot up 38% to about Rs 437 crore.

Adding to the Rs 1,000 crore order intake in the first quarter, Wabag has added a further Rs 1,000 crore. ET wrote recently how the company is vigorously pursuing orders, so that it can have a sizeable order book ahead of the poll period, which is usually seen as a drag on business.