GVK Power & Infrastructure Limited has been admitted into the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code. The company has also released a provisional list of prospective resolution applicants, which includes notable names like Vedanta, Jindal Power, Shyam Sel and Power, JSW Energy, and Zeal Global Opportunities Fund.
Financial Performance Boosts Sentiment
Despite its CIRP admission, GVK Power’s financial performance for Q2 FY25 has impressed investors, leading to a 2% surge in share price. As of 9:43 AM, the shares were trading at ₹5.21 on the NSE.
Key Financial Highlights:
- Net Sales:
The company reported net sales of ₹390.87 crore, marking a 93.8% growth compared to the average net sales of the last four quarters. This robust growth reflects a positive sales trend in the near term. - Profit Before Tax (PBT):
PBT (less other income) stood at ₹194.46 crore, representing an 861.1% growth over the average PBT of the last four quarters, showcasing a strong turnaround. - Profit After Tax (PAT):
PAT surged by 2,739.5% compared to the average PAT of the last four quarters, signaling significant profitability improvements. - Operating Profit:
The company achieved its highest operating profit (PBDIT) in five quarters at ₹361.22 crore, with an operating profit margin of 92.41%, indicating enhanced efficiency. - Interest Coverage:
The operating profit to interest ratio improved to 3.28 times, the highest in the last five quarters, underscoring better financial management.
Outlook and Implications
The combination of strong financial results and the CIRP process has drawn significant attention from investors and potential resolution applicants. While the CIRP poses challenges, the company’s recent financial improvements could make it an attractive proposition for bidders like Vedanta and JSW Energy.
