HCC reports Rs 5 crore net profit in Q3

Construction major had reported a net loss of Rs 39 crore in the corresponding quarter of the previous financial year

Don't want to miss the best from Business Standard?

Hindustan Construction Company (HCC) today reported a standalone net profit of Rs 5.39 crore in the October-December quarter after cutting expenses.

The construction major had reported a net loss of Rs 38.51 crore in the corresponding quarter of the previous financial year.

Net sales, however, declined 14.7% to Rs 870.37 crore from Rs 1,020.75 crore, it said in a filing to the BSE.

Total expenditure fell to Rs 713.28 crore, equivalent to about 82% of net sales, compared with 93.1% of net sales a year earlier.

Finance costs rose 9.4% to Rs 156.66 crore.

Company auditors K S Aiyar & Co drew attention to a demand of Rs 741.51 crore and interest related to alleged contravention of provision of service tax by the company between April 1, 2007, and March 31, 2012.

The company is of the view that it has a reasonably strong case as most of the demand appears to be fictitious and the remainder can be contested since the legal outcome of the same is pending, according to the note from the auditors.

Commenting on the results, Chief Financial Officer Praveen Sood said in a separate statement that "despite a marginal dip in turnover, the operational efficiency we have achieved clearly manifests in this quarter."

He said HCC will continue to implement measures to improve financial parameters and "inflow of substantially big orders during the quarter will help to improve the turnover in the next few quarters."

The company had an order backlog of Rs 13,388 crore in December, including Rs 2,040 crore of contracts bagged in the last quarter. HCC was also the lowest bidder for contracts worth Rs 1,408 crore, the company said.

Among HCC's group firms, Switzerland-based Steiner AG registered revenue of CHF 188.3 million (Rs 1,230.1 crore) and net profit of CHF 1.6 million (Rs 10.2 crore) in the last quarter. The company had an order book of CHF 1.16 billion and unsigned contracts worth more than CHF 170 million.