L & T Lends Sheen To Cement Sector

The cement sector, which clocked a 300 per cent net profit growth in the fourth quarter of last year (January-March 2001), seems well on course to follow up the impressive performance in the first quarter of the current fiscal.

After impressive results by ACC, Larsen & Toubro has reported its highest-ever net profit growth in the quarter ended June 2001.

L&T's net profit increased by a whopping 244.7 per cent to Rs 248.7 crore. The company has been on an upward march with a sustained rise in net profit in the previous three quarters.

Of the last 14 quarters, the company has reported a decline in net profits seven times. Prior to sustained net profit growth in the last three quarters, it had reported a hefty drop in net profits for five consecutive quarters running (Sept 1999 -Sept 2000).

During the quarter ended June 2001, sales revenue increased 10.1 per cent to Rs 1,830.97 crore much higher than the 4.4 per cent increase in the quarter ended March 2001.

Total expenses increased at a slower pace, compared to the growth in sales. Total expenses had increased 6.5 per cent in the first quarter.

Interestingly, due to voluntary production cuts, L&T posted a modest 2.6 per cent increase in cement production and corresponding cement sales.

The current quarter's numbers are however inflated with the inclusion of operating results of its rubber processing line.

Even after including rubber division sales in the financial performance for June 2000, the rate of growth comes to a handsome 195 per cent in net profit and 8.8 per cent in sales income.

Profit margins were higher on year-on-year basis. Operating profit margin for the quarter jumped to 14.3 per cent from 10.8 per cent in the same quarter of the previous year. Net profit margin increased from 1.14 per cent to 3.6 per cent.