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| Larsen & Toubro profit up 26% |
| BS Reporter / Mumbai Oct 23, 2009, 00:41 IST |
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Reports Rs 580-cr profit, aided by sale of ready mix concrete biz, stake sale in paper making JV.
Larsen and Toubro (L&T), the engineering and construction giant, has posted 26 per cent rise in profit at Rs 580.40 crore in the second quarter, supported by a one-time gain from sale of its ready mix concrete (RMC) business and stake sale in a paper manufacturing joint venture. The income rose 2.5 per cent to Rs 7,918.84 crore despite substantial drop in revenue from electrical and electronics, and machinery and industrial products divisions.
The company, which has an order backlog of Rs 81,623 crore, has raised its guidance for order inflows this financial year, as construction business picks up in the country.
It expects new orders to increase more than 30 percent, up from its earlier forecast of 25 percent, but said revenue growth may slow to 15 percent from the earlier estimate of 15-20 percent.
Y M Deosthalee, chief financial officer, said the subdued growth was on the back of delay in clearances for infrastructure projects and lower offtake of industrial products and machinery. He expects to maintain 30 per cent overall Ebitda margins.
The market reacted negatively to the lower revenue growth, and L&T shares slipped 3.86 per cent and closed at Rs 1608.50. The shares earlier fell as much as 4.7 percent, the most in two months after August 17. The stock has more than doubled this year, compared with a 76 percent gain in the benchmark Sensitive Index of the Bombay Stock Exchange.
During the September ended quarter, higher earnings from trading in securities and dividend income have lifted other income to Rs 217.55 crore from Rs 133 crore a year earlier.
The company made a one-time gain of Rs 27.38 crore. Raw material costs increased to Rs 1,870 crore from Rs 1,780 crore, while employee expenses rose to Rs 709 crore from Rs 604 crore, the company said. Operating profit margin (OPM) has improved to 10.6 per cent as against 9.3 per cent in the same period last year.
Along with the Middle East, the company is also looking at other overseas markets in South America and South Africa and is set to open an office in Brazil, Deosthalee said.
L&T has raised $600 million this month selling shares and bonds to large investors to add railways, defence and ships to its main business of building factories, roads and bridges. It has a capital expenditure plan of Rs 1,500 crore this financial year.
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