New Delhi : Highways sector player Dilip Buildcon, which reported a 11.1 per cent rise in its net profit for the March quarter, on Wednesday saw its shares plunging up to 15 per cent intraday after reports said that some auditors have resigned, delaying the announcement of January-March earnings.
Reports of promoters pledging their shares to infuse funds into the company raised fears that the firm was facing cash shortage and dragged down the stock. Later, shares came off lows after the company clarified that joint auditors Mukund M. Chitale & Co and MSG & Associates are still with the company, but concern over promoters pledging shares continued to weigh on the sentiment.
Shares of Dilip Buildcon on Wednesday ended at Rs 917.60, down 12.9 per cent, on the BSE. The company was scheduled to announce its January-March earnings on Tuesday, but announced them before market hours on Wednesday.
Dilip Buildcon net profit rose to Rs 217.7 crore for the quarter ended March 2018 as against Rs 196.1 crore for the year-ago quarter.
Its total income rose to Rs 2,562 crore during the quarter as against Rs 1,753.5 crore in the year-ago period.
The company’s total expenses also rose to Rs 2,283.8 crore during the quarter against Rs 1,563 crore in the same quarter of 2016-17.
Dilip Buildcon’s weak operating performance in the quarter also weighed on the sentiment. The company’s operating margin in the quarter shrank by 181 basis points on year to 18.47 per cent.
According to data available, Dilip Buildcon’s promoters pledged shares worth Rs 541 crore. The promoters pledged their shares in return of bank guarantees for the company’s projects.
There is growing concern among investors that the company may be facing a cash crunch and promoters are infusing funds into the company by pledging their stake, analysts said.
Data showed that promoters own around 75.6 per cent stake, mutual funds 6.6 per cent and foreign investors hold 10 per cent stake in the company.
Devendra Jain and Dilip Suryavanshi, the two largest stakeholders in the company, pledged 2.83 per cent and 4.79 per cent of their stake, respectively, in the company with RBL Bank, as per the disclosures made to stock exchanges.
In past one year, shares of Dilip Buildcon had outperformed the market by surging 140 per cent from Rs 439 against 12 per cent rise in the Sensex till Tuesday.
It touched an all-time high of Rs 1,248 on May 15, 2018 on the BSE in intra-day trade.