HCC Shares Drop 4% After Rs 180 Crore Claims Settlement: Key Financial Updates
Claims Settlement and Impact on HCC’s Finances
HCC recently concluded a claims settlement worth Rs 180 crore with a major client, which led to a reduction of client advances by approximately Rs 130 crore. The remaining Rs 50 crore will be received as cash consideration, boosting the company’s liquidity position. HCC stated that this settlement would also result in a reduction of annual financing charges by Rs 15 crore.
Strong Bid Pipeline and Future Outlook
As of September 30, 2024, HCC’s order book stood at Rs 9,773 crore. The company has submitted bids worth Rs 3,800 crore, which are currently under evaluation, while it is actively working on a future bid pipeline worth Rs 46,000 crore.
ICRA projects that HCC will see an increase in gross billing from its core Engineering, Procurement, and Construction (EPC) business, with new orders contributing to its financial performance. The company’s strong track record in handling complex projects, including tunneling and hydro projects, continues to support its growth potential.
Quarterly Performance and Project Milestones
For the quarter, HCC reported a standalone turnover of Rs 1,203 crore and a net profit of Rs 50.20 crore. In addition, the company made significant strides in its project portfolio, including the completion of a 3.5 km tunnel for the Vishnugad Pipalkoti hydropower project and key developments on the Anji Khad Bridge, Mumbai Metro Line 3, and Tehri Pumped Storage projects.
HCC also received its project taking-over certificate for the Delhi Metro’s DC06 package and saw the inauguration of the southbound arm of the Mumbai Coastal Road Project by the Maharashtra Chief Minister.
Financial Strategy and Liquidity Management
HCC raised Rs 350 crore through a rights issue in April 2024 to improve its liquidity position. The timely realization of these funds will be critical for meeting debt repayments in March 2025. Additionally, HCC is focused on the monetization of non-core assets and the realization of awards to further strengthen its liquidity.
ICRA has highlighted that, despite not having sanctioned fund-based working capital lines, HCC is maintaining over Rs 200 crore in liquidity on a sustained basis. The company is also utilizing unutilized arbitration/court bank guarantees to ensure access to funds if required.
