Deepak Builders & Engineers Reports Q2 Revenue Decline, Improved EBITDA Margin
Deepak Builders & Engineers India Limited (DBEIL) reported a 63.3% year-over-year revenue decline to ₹451.00 crore in Q2. Net profit fell 66.9% to ₹50.00 crore. Despite this, EBITDA margin improved to 28.28% from 22.71%. The company cited heavy rain and site unavailability as reasons for slow construction pace. DBEIL declared a final dividend of ₹1 per share for the year ending March 31.
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Deepak Builders & Engineers India Limited (DBEIL) has released its financial results for the second quarter, revealing a mixed performance marked by revenue decline and improved profitability margins.
Revenue and Profit
The company reported a significant year-over-year decline in revenue for Q2. DBEIL's revenue stood at ₹451.00 crore, down from ₹1,227.56 crore in the same quarter of the previous year, representing a 63.3% decrease.
Net profit also saw a substantial drop, falling to ₹50.00 crore from ₹151.00 crore year-over-year, a decrease of 66.9%.
Improved EBITDA Margin
Despite the revenue and profit decline, DBEIL managed to improve its EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin. The EBITDA margin increased to 28.28% in Q2, up from 22.71% in the corresponding quarter of the previous year. However, the absolute EBITDA decreased to ₹127.00 crore from ₹277.00 crore, reflecting the overall revenue decline.
Financial Position
As of September 30, DBEIL's balance sheet showed:
| Particulars | Amount (in crore rupees) |
|---|---|
| Total Assets | 8,712.59 |
| Total Equity | 4,276.77 |
| Non-Current Liabilities | 1,783.06 |
| Current Liabilities | 2,653.73 |
Operational Challenges
The company attributed the decline in revenue and profits to operational challenges. In a statement, DBEIL noted, "The pace of construction at running projects has been slow due to heavy rain during the months of July and August and non-availability of blocked sites." This suggests that weather conditions and project site issues significantly impacted the company's performance during the quarter.
Dividend Declaration
On a positive note, DBEIL has declared a final dividend of ₹1 per share (10% of face value) for the year ending March 31. This decision was approved by shareholders at the Annual General Meeting held on September 27.
Looking Ahead
While the Q2 results show a challenging period for Deepak Builders & Engineers, the improved EBITDA margin suggests that the company has been focusing on operational efficiency. The management's ability to enhance profitability margins in a difficult quarter may be seen as a positive sign for potential recovery as external challenges subside.
Investors and stakeholders will likely be watching closely to see how DBEIL navigates the ongoing challenges in the construction sector and whether the company can leverage its improved operational efficiency to drive growth in the coming quarters.
