The stock of Man Infraconstruction took an abrupt about-turn from the impressive gains it had charted since its market debut on the fall-out of the loans-for-bribes fiasco involving real estate companies and banks which broke out in November 2010. Man Infra is primarily a construction contractor in real estate and infrastructure.

With reports naming DB Realty a participant in the bribery case, the stock of Man Infra plunged over 30 per cent in a week as about 40 per cent of its Rs 2,100-crore order book came from D B Realty alone. Dependence on D B Realty aside, Man Infra's order book has a high exposure to the real estate segment of over 80 per cent. Prospects are still bleak in the real estate market and climbing interest rates, thanks to uncontrollable inflation, could further hurt housing demand. A prolonged monsoon period also hampered execution.

For the quarter ended December 2010, consolidated revenues dipped four per cent while net profits fell a massive 45 per cent on high input costs such as steel. Even considering the nine-month period ended December 2010, high operating expenses led to a one per cent net profit growth even as revenues were up 24 per cent.

With commodity prices on the rise, the company could see further operating margin erosion.

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