IRB and ITNL both at not-so-admirable place in Q4 of 2015-16

Larger revenue emergence along with absence of enormous operational margins is the same story shared by IRB infrastructure and IL & FS Transportation Networks (ITNL), India’s biggest road toll operators, post their March quarter performance.

IRB Infra announced its revenue at Rs.1,537 crore after market hours for the fourth quarter of 2015-16 which is way ahead of Bloomberg estimate of Rs. 1,3076 crore while showing surge by 55 per cent in comparison to previous year. Perhaps, operating and financing costs have not exhibited a remarkable hike, thought went beyond expectation yet grew only 9.4 per cent over the year, influencing the net profit of Rs. 152 crore. Since company carried out a higher number of construction projects, operating expenses were majored by 89 per cent in Q4 whilst the share of construction projects to total revenues got ahead to 62 per cent in Q4 of FY15, not to forget operating margins stood at 20-25 per cent in regard to toll projects at 80-85 per cent, nevertheless yields coming from construction business remains undisturbed and doubles to Rs. 953 crore.

An official spokesperson from IRB confirmed,” Concerning the execution low-yielding referring to Utility shifting etc (which were traditionally done by NHAI bit being executed  as obligation of contract)  contributed to the overall drop of the operational margins from 56-58 per cent to 48 per cent. However it is evaluated that share of construction projects remains high at Rs. 8,000 crore as they are queued up for implementation in next two years along with return of operational marginal profits to 55-56 per cent in FY17 is awaited.”

At the same time ITNL that bids for hybrid annuity model (HAM) projects, also witnesses better revenue along with moderate profit on the grounds of increased interest cost. It is forecasted that ITNL is overburdened with debt and presuming it to lower down soon is unlikely.