Shares of GR Infraprojects hit an all-time low of 1,485.80 rupees, down 4% from BSE in intraday trading on Friday. The construction and engineering company’s stock has fallen 22% so far in February after the company reported subdued earnings for the December quarter (Q3FY22). By comparison, the S&P BSE Sensex was down 0.39% over the same period.
GR Infraprojects made its public debut on July 19, 2021. The Rajasthan-based road and highway construction major raised Rs 963 crore via an initial public offering (IPO). The company had issued shares at Rs 837 per share. With the current month’s fall, the stock has corrected 35% from its all-time high of Rs 2,277 reached on October 25, 2021.
In Q3FY22, the company’s consolidated profit after tax (PAT) decreased by 65% year-on-year (YoY) to Rs 145.40 crore, due to lower operating income. Operating revenue declined by 20% year-on-year to Rs 1,980 crore. Earnings before interest, taxes, depreciation and amortization (EBITDA) contracted by 10.2 percentage points to 19.33%. The company said the lower margin was mainly due to the net decrease in claims and bonus income recognized due to early completion of projects, amounting to Rs 170 crore for the current period compared to the previous period.
“GR Infraprojects experienced moderate execution in Q3FY22 due to delays in receiving set dates in its projects. Margin was impacted due to some one-time expenses incurred and increased input costs. Backlog stood at Rs 14,600 crore (excluding L1), with an order book to revenue ratio of around 1.8x,” Motilal Oswal Financial Services said in its earnings update.
Order entries and execution have been weak so far in FY22. However, the project pipeline remains strong, which should lead to order intake in the near term. The recent receipt of set dates should provide execution support in fiscal 23 and 24, the brokerage said. “We are lowering our FY23/24 revenue estimate by 11%/10%, EBITDA estimate by 18%/13% and earnings estimate by 22%/15% to account for “a delay in receiving set dates. in HAM projects and low order flow. With an order book of Rs 14,600 crore, excluding L1, we expect GRIL to see 12% growth in its revenues in fiscal year 21-24E, with an EBITDA margin of between 16-17%,” he said.
Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.
As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.
Support quality journalism and subscribe to Business Standard.