IRCON Q2 Profit Falls 18% YoY, Margins Shrink Amid Revenue Drop

Key Takeaways from IRCON’s Financial Performance:

• IRCON's Q2 net profit dropped 18% YoY, falling to ₹206 crore from ₹250.7 crore in the same period last year.  
• Despite an improvement over the previous quarter's profit of ₹176.5 crore, revenue fell by 19.3% YoY, to ₹2,447.5 crore.  
• EBITDA decreased by 23.3% to ₹201 crore, with the EBITDA margin shrinking to 8.2% from 8.6% in Q2 FY24.  
• Domestic revenue declined by 17.8% YoY, while international revenue dropped more sharply by 53% YoY.

The fall was despite a slight improvement compared to the previous quarter's profit of Rs 176.5 crore.

The company’s revenue from operations for the quarter decreased by 19.3% YoY, to Rs 2,447.5 crore, down from Rs 3,033.3 crore in Q2 of the previous year. 

Earnings before interest, taxes, depreciation, and amortisation (EBITDA) also fell by 23.3% to Rs 201 crore, with the EBITDA margin narrowing to 8.2% from 8.6% a year ago.

The company's domestic revenue dropped by 17.8% YoY to Rs 2,206.03 crore, while international revenue saw a more significant decline, falling to Rs 92.83 crore from Rs 197.67 crore in the previous year.

About IRCON International Limited:

IRCON International Limited (IRCON), a public sector enterprise under the Ministry of Railways, was established in 1976. It is a leading turnkey construction company known for its quality, reliability, and performance. IRCON specialises in railway and highway construction, electrical substations, and metro rail projects (MRTS). With operations in India and across countries like Malaysia, Nepal, Bangladesh, and the UK, IRCON has completed over 300 infrastructure projects in India and over 100 globally, spanning more than 21 countries. The company is known for handling challenging terrains and being an active participant in key nation-building infrastructure projects. 

Key Takeaways from KFin Technologies and CAMS  Joint Venture:

• KFintech and CAMS have formed a 50:50 joint venture to develop and operate the 'MF Central' platform.
• The platform aims to enhance mutual fund transactions and will be registered as a category-1 execution-only platform with AMFI.
• KFintech will invest up to Rs 13.5 crore in the JV, along with pre-incorporation expenses.
• The JV is expected to be completed within four months, subject to regulatory approvals, and supports SEBI’s push for improved mutual fund transaction standards.

The JV will be equally owned by KFin Technologies (KFintech) and Computer Age Management Services Limited  (CAMS) , each holding a 50% stake. The new company will focus on owning, developing, maintaining, and running the 'MF Central' investment management platform, which has been designed to enhance the mutual fund transaction experience for investors. The platform will be registered as a category-1 execution-only platform with the Association of Mutual Funds in India (AMFI). 

As part of the transaction, KFintech will infuse up to Rs 13.5 crore into the new venture in cash, along with pre-incorporation expenses. The JV is expected to complete within four months, subject to regulatory approvals. 

The platform is set to become an integral part of the evolving mutual fund ecosystem in India, as it aims to provide seamless, integrated solutions for mutual fund transactions, investor service requests, and tracking. This move is in line with the Securities and Exchange Board of India’s (SEBI) push to standardise and improve investor experiences in mutual fund dealings.

The incorporation of the new company is expected to be completed within the next few months, with both companies equally sharing the control and responsibilities for the venture.

About Kfin Technologies Limited:

KFin Technologies is a leading digital platform that provides mission-critical services to asset managers globally. Specialising in SaaS-based transaction management, compliance, data analytics, and channel management, KFintech supports clients across mutual funds, AIFs (alternative investments), pensions, wealth management, and corporate sectors. The company operates in India and internationally, offering a wide range of solutions for asset managers, including investor and corporate services. KFintech has become the preferred partner for numerous AMCs, AIFs, and corporates, with a market-leading position in India and Southeast Asia. It continues to expand, providing cutting-edge solutions and fostering growth in the financial services industry.

Key Takeaways from the Award Win

• Sterlite Technologies was named as L1 bidder by BSNL for Bharat Net’s Middle Mile network in Jammu & Kashmir.
• It includes comprehensive DBOM services for the development and upgradation of broadband infrastructure.
• The project reinforces STL’s role in India’s digital infrastructure expansion, contributing to Bharat Net's national connectivity goals.

This contract aligns with BSNL's strategic goal to strengthen rural broadband connectivity across India, and STL's scope involves a Design-Build-Operate-Maintain (DBOM) model.

The contract is set for completion over three years, with a subsequent 10-year maintenance period to ensure operational continuity. The total project value is estimated at INR 1,625 crore, with maintenance costs structured at 5.5% per annum of the capital expenditure for the first five years, increasing to 6.5% per annum for the remaining period.

This development contract focuses on Jammu & Kashmir, marking STL's significant involvement in expanding digital infrastructure in this region.

About Sterlite Technologies Limited

Founded in July 2001 after the telecom division demerger from Sterlite Industries Ltd (SIL), Sterlite Technologies Limited (STL) is now India’s largest manufacturer of Optical Fiber and Optical Fiber Cables. Expanding in 2006 by acquiring SIL's transmission line business, STL ventured into power transmission cables. Today, it holds a strong presence in global markets, contributing significantly to the international optical fiber industry.

About BSL Limited

Incorporated in October 1970, BSL Ltd. (formerly Bhartiya Udyog Sangh) manufactures a diverse range of textiles, including polyester-viscose, polyester-wool, and 100% woolen fabrics, along with worsted and blended yarns. Known for its BSL Suitings brand, the company has a nationwide network of agents, dealers, and retailers. Over the years, BSL has expanded its production capacity and modernised its facilities, including an upgrade with Sulzer Rapier weaving machines and a 3.10 MW captive power plant. A 100% Export-Oriented Unit, BSL has also partnered with Germany’s Wulfing Tuchfabrik GmbH to produce woolen/worsted fabrics. Recognised for export excellence, BSL received the National Export Award and holds an ISO-9002 certification.

Key Takeaways from Inox India Contract:

• INOX India wins contract for the world’s largest Liquid Air Energy Storage (LAES) project in Manchester, UK.
• The company will supply 690kl vacuum-insulated cryogenic tanks for the facility.
• This marks INOX India’s first liquid air energy storage project.
• The Carrington facility will provide 300 MWh storage and 50 MW output to balance renewable energy.

This marks INOX India’s first involvement in liquid air energy storage and sees the company producing the largest shop-fabricated vacuum insulated industrial gas tanks ever created by INOX India. 

The project will play a key role in advancing the UK's clean energy infrastructure and support the country’s transition to Net Zero.

The Carrington facility, once operational in 2026, will have a storage capacity of 300 MWh and an output power of 50 MW per hour for six hours, offering a reliable solution for balancing renewable energy supply and demand.

About INOX India Limited:

INOX India Limited (INOXCVA) is a leading global provider of custom cryogenic solutions, serving customers across the clean energy sector, including industries such as industrial gases, LNG, hydrogen, and cryoscience. For over 30 years, the company has offered a range of products, including standard cryogenic tanks, beverage kegs, and bespoke equipment, as well as large-scale turnkey projects. These solutions are used in various industries, including energy, steel, healthcare, chemicals, aerospace, pharmaceuticals, and construction. Additionally, INOXCVA manufactures cryogenic equipment for global scientific research. In Fiscal 2022, it was the largest exporter of cryogenic tanks from India, according to a CRISIL report.