IFCI Reports Disappointing Q3FY13 Numbers

IFCI today reported a disappointing set of Q3FY13 numbers. For the December 2012 quarter, the company posted a decline in both its topline and bottomline. The stock, over its bad quarterly numbers, was hammered and closed the day lower by 2.35% to Rs 33.25 per share. The following table shows us the overall financial performance of the company for Q3FY13:

For the December quarter, the net sales of the company declined by 6% to Rs 632 crore on a yearly basis, while Net Profit stood at Rs 76 crore against Rs 114 crore in the similar period last year, declining by 33%. Profit of the company decreased majorly after it made higher provisions. For Q3FY13, Provisions of the company stands at Rs 70 crore against a negligible amount of Rs 0.62 crore in the similar quarter last year.

Apart from the numbers, last month Rakesh Bharti Mittal and Chandan Bhattacharya have also resigned from the board of the company. Institutional investors have also exited from the stock. As on December 31, 2012, FIIs hold around 5.04% of the total stake against 12.22% at the end of June 2012 quarter. While the DII stake stands at 12.47% against 30.69% of the total shares as on June 2012.

On the valuation front, the stock is available at TTM Price to Earnings multiple of 5x. Overall, we believe that the company has posted disappointing Q3FY13 numbers. There could be a further potential downside on the counter on account of the poor set of numbers and hence would advise investors to stay away from the stock.