RCF Reports Poor Q4FY13 Numbers

State-owned RCF has reported subdued results for the fourth quarter of FY13. The company has reported a 13% decline in its topline to Rs 2176 crore. Its net profit has marginally grown from Rs 113 crore a year before to Rs 117 crore in Q4FY13. 

The Trombay plant during Q4 has reported a 9% rise in revenues to Rs 804 crore. The Thal plant too has reported a 24% rise in revenues to Rs 890 crore. The trading business however has disappointed in the quarter as it saw a decline of 54% in the segment revenues. This segment constitutes 22% of the company’s topline and hence the impact was seen on the consolidated topline of the company.

On the margin front, a sharp expansion of the EBITDA margins was seen due to the decline in the traded goods. Overall, the EBITDA margins stood at 10.87% against 7.41% reported a year ago. During FY13, the company has seen a consistent expansion of the EBITDA margins on a sequential basis. The Q4 EBITDA margins are also the highest in the last 2 years. Similarly, the PBIT margins of the Trombay and Thal operations have shown a rise. Those of Trombay are the best in the last four quarters while that of Thal are best in the last two years. 

The quarter has seen a sharp rise in interest expenses from Rs 24 crore to Rs 35 crore. On the other hand, its other income has declined to Rs 22 crore. The company, during the quarter, has reported taxes of Rs 33 crore, a drop of 44%. At the PBT level, the company has reported a decline in profit and hence the stock is likely to show a negative performance on the bourses.

For the full year, the company has not shown any consistency in the EBITDA margins. Besides, the key ratios are also showing a fall meaning that investors may not like this volatility in the performance.

Over last 3 months, the stock has declined by 20%, under-performing the broader markets. We expect the stock to continue the same streak and hence advise investors to avoid it.