Equipment to the Rescue

Era Infra Engineering, the flagship company of the Era Group, has leveraged its equipment-hiring vertical to boost the overall revenue. And, if the recent financial statement of the company is anything to go by, the vertical has salvaged the company from making any losses. While Era had posted an overall profit of Rs 110.38 crore during the nine months ending December 2011, its profit from the equipment-hiring segment alone was Rs 113.70 crore.Apart from the aforementioned segment, Era Infra Engineering generates revenue from the contracts and energy sectors and ready-mix concrete and trading. While contracts – the company’s main breadwinner – yielded a return of 10.3 per cent on the capital employed during the above nine months, the equipment-hiring business yielded a 10.8 per cent return on the capital employed.The difference in the company’s revenue growth from contracts and from equipment hiring is especially striking during the Jul-Sep 2011 quarter. In this period, while revenue from contracts expanded at a paltry 0.4 per cent to Rs 772 crore on a year-on-year basis, that from the equipment-hiring segment grew at 36 per cent to Rs 64.7 crore.Moreover, the firm reported net revenue of Rs 892 crore, which is 10 per cent higher from a year ago. It is learnt that the firm’s revenue growth was slack during the quarter owing to slower execution of projects. However, when contacted, an official from the company refused to comment. Having recently started its equipment management division to create an additional revenue stream, the company seems to have hit the nail on the head!To share your views on these reports, write in at feedback@ASAPPmedia.com