Alstom Projects Reports 63 Per Cent Rise In Net Profit

Alstom Projects, a capital goods company, announced its March quarter results yesterday after the market hours. The company reported a healthy 44 per cent rise in its topline to Rs 1,123 crore with 63 per cent growth in its net profit to Rs 137 crore. The revenues from the power segment were up by 40 per cent to Rs 1,058 crore while that from the transport segment declined by 19 per cent to Rs 20 crore. 

The company has reported EBITDA margin expansion in the March quarter by 145 basis points, its full year result was disappointing. For the year FY12 it reported 34 per cent growth in its sales. Overall its topline grew by 36 per cent to Rs 2,469 crore while its net profit declined slightly from Rs 169 crore to Rs 168 crore. The EBITDA margins in the yearly results were down by 446 basis points mainly due to the increased raw material costs.

The inventories as a percentage of sales for the year FY12 have declined to 12 per cent from the earlier level of 25 per cent in FY11. Its higher inventory turnover ratio indicates a higher off-take of the products. On the other hand, the company has reported a rise in its receivables. As an impact of this the company has reported lesser cash i.e. Rs 227 crore in FY12 compared to Rs 736 crore in FY11.

During the year the company has adopted a method of accounting of derivative contracts due to which its net profit is higher by Rs 1.43 crore in the quarter and by Rs 9.77 crore in the full year. It has also demerged its boiler business to another subsidiary. The boiler business added Rs 552.98 crore to the topline and Rs 37 crore to the bottomline in FY12.

We wanted to know from the company details about its order book and order inflow in FY12 but our query remained unanswered. As far as capital goods are concerned, the order books in the sector may remain muted due to the overall environment in the country. Recently state-owned PSU BHEL in its flash results reported heavy decline (63 per cent) in its order book. Besides the new capex cycles are expected to remain weak as the interest rate will not significantly be cut down as per the RBI statement.

Investors should be very cautious with capital goods’ stocks at the moment as the margins are falling due to the competition. The order books are also shrinking in size. The shares of Alstom Projects rose by 1.63 to end the day on Rs 395.55 today.