Diamond Power Infrastructure reported strong growth in its Q2 FY 2011 results. Diamond Power‘s net sales during in the September 2010 Quarter was Rs 350.06 crores as compared to Rs 172.64 crores in Q2FY10. while the sales more than doubled (102.80%), Diamond Power‘s profits increased 66 per cent to Rs 27.76 crores in Q2 FY 2011 as compared to Rs 16.72 crores in Q2 FY 2010.
Diamond Power continued the strong showing in the six months period ended September 30 as well. Diamond Power‘s sales increased 105.4 per cent to Rs 731.67 crores while the net profit during this period grew by 133.2 per cent to Rs 58.98 crores.
| (Rs cr) | Sep 2010 | Sep 2009 | YOY |
|---|---|---|---|
| Operating Income | 350.07 | 172.64 | 102.77 |
| Total Expenses | 300.46 | 144.57 | 107.83 |
| Operating Profit | 49.61 | 28.07 | 76.74 |
| Other Income | 0.29 | 0.35 | -17.14 |
| PBDIT | 49.90 | 28.42 | 75.58 |
| PBT | 42.26 | 21.13 | 100.00 |
| Adjusted Net Profit | 27.76 | 16.72 | 66.03 |
In Q2 FY 2011, Diamond Power started trial production at its transmission tower facility at Vadodara. Diamond Power has invested 40 crores in this facility and it has a capacity of 48,000 tonnes per annum. The result is that Diamond Power‘s results for H2 FY 2011 are also expected to be strong.
However, despite the strong financial showing, Diamond Power‘s EPS for Q2 FY 2011 was lower at Rs. 7.46 as compared to the Q2 FY 2010 EPS of Rs. 7.95. The H1 FY 2011 EPS was higher at Rs. 15.85 as compared to the H1 FY 2010 EPS of Rs. 12.02. The reason for the non-commensurate rise in the EPS is the bloating of the equity capital from Rs. 21.04 crores to Rs. 37.20 crores. A qualified institutional buyers (QIB) was raised in July 2010 raising Rs 114 crore via issue of 5.59 million equity shares of face value of Rs 10 each issued at a price of Rs 203.80 per equity share.
The result is that that Diamond Power is a bit subdued on the bourses owing to the EPS dilution. However, this is a temporary phase and should not detract long and medium term investors from Diamond Power‘s potential (see also Diamond Power Infrastructure: Scorching Growth!)
Diamond Power’s Research Report
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