Topline inline with expectations at Rs 8.6bn (+18% yoy). The company has now reported topline of Rs 18.8bn in 1HCY16 (+42% yoy). EBITDA margins at 4.9% fell by 200bps yoy (-160bps qoq) – significantly below expectations of 6.9%. Margins fell due to losses in JV (esp DMRC project JVs), which reported losses of Rs 224mn in the quarter (Rs 40mn profit in 2QCY15). PAT, at Rs 52mn (+65% yoy), was significantly below our and consensus expectations (Rs 160mn), driven by low EBITDA margins. Orderbook was Rs 44.3bn (1.2x book-to-sales); Rs 72bn including L1 (2.1x). L1 includes Rs 11.2bn Mumbai Metro phase 3 order (accrued in July), while the Udangudi jetty project (Rs 12bn) is delayed, and might accrue by CY16 end. Balance sheet improved significantly, with inventory reduction of over Rs 3.6bn – leading to net debt reduction Rs 2.2bn (gross debt down to Rs 4.9bn from Rs 6bn. Cash up to Rs 2.7bn from Rs 1.5bn). Inventory days reduced to 81 from 140 days, leading to reduction in WC cycle to 65 days from 85 days.Phillip Capital continue to value the company at 15x CY17 P/E (inline with valuation for other EPC companies). They downgrade to NEUTRAL with price target of Rs 135 (Rs 140 earlier), on expensive valuations.