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McNally Bharat – Result Update

June 17, 2008

McNally Bharat’s 4Q FY08 sales rose 20.3% yoy, to Rs2.06bn, 18.9%. Sales were under pressure due to some execution delays and to the proportionately greater share in the order book of sectors like steel, where the average execution cycle is longer.

The EBITDA was Rs174m, vaulting 221.5% yoy. The EBITDA margin expanded 528bps yoy, to 8.4%, against the expected 365-bp expansion. The margin expansion mainly stemmed from the lower base and the non-materialization of the anticipated (when bidding) cost pressures. The bottom line for the year grew 47.7% yoy, to Rs96m. The higher EBITDA margin and lower interest chiefly led to the robust bottom line even as the top line came under pressure.

The company is expected to post a 22% topline growth over FY 2010.

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