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NBCC in Q1 shows Amrapali homes may remain a dream

Navratna PSU NBCC published results on Thursday and shares tumbled to a distressing five year low to Rs 35.60, the stock has corrected nearly 50% in the last one year
New Delhi: NBCC (India) Ltd., a Navratna CPSE under the Ministry of Housing and Urban Affairs (MoHUA), Govt. of India, has announced its first-quarter results and its disappointing. NBCC’s operational revenue during the quarter declined 16 per cent at Rs 1,886 crore, against Rs 2,252 crore in the corresponding quarter of previous fiscal. The PSU's real estate division reported an unbelievable Rs 14 lakh profit before tax and interest, as compared to Rs 68 crore in previous year quarter. The company reported a total consolidated net income of Rs 1,941.73 crore for the June quarter, down 16% from Rs 2,307.81 crore recorded in the same quarter last year.

Distress in written on the wall

The revenue of the segment crashed to Rs 5 crore from Rs 130 crore, 96 % down in the year-ago quarter. As soon as the company posted the disheartening Q1 company's stocks plunged more than 14%. At 10:57 am, the NBCC stock was trading at Rs 35.60, down 10.4%, on BSE after hitting an intra-day low of Rs 34.05, its lowest in almost five years. The NBCC board also recommended a final dividend of Rs 0.65 per equity share on a face value of Rs 1 per equity share for FY19.

How will homebuyers get their dream home?

Earlier in this month only the Supreme court had handed over nearly 42,000 homes that are left incomplete by Amrapali. The satisfaction of the work awarded to NBCC was clear on the faces of distressed homebuyers. With the numbers on board for NBCC in Q1, it is not difficult to make that homebuyers still have reasons to worry. NBCC (India), a PSU, is organized into three market focused segments: project management consultancy, engineering procurement and construction (EPC) and real estate.