L&T net profit falls 37%, misses estimates

Reported a profit of Rs 967 cr in Q1 last year

Engineering and infrastructure major Larsen & Toubro (L&T) saw its April-June consolidated net profit decline 37 per cent to Rs 606 crore, against Rs 967 crore in the corresponding period last year. Though the net profit in the year-ago period includes exceptional gains of Rs 249.3 crore, the June quarter profit was lower than Bloomberg consensus estimates of Rs 830 crore.

The consolidated net sales registered a 6.7 per cent growth as it rose to Rs 20,252 crore versus Rs 18,975 crore in the year-ago period. Consensus had pegged net sales at Rs 20,251 crore.

International revenue during the quarter at Rs 6,609 crore constituted 33 per cent of the total revenue, much higher than 26 per cent in the year-ago period.  The miss was clearly at the operating profit level as Ebitda (earnings before interest, tax, depreciation and amortisation) slipped nine per cent year-on-year to Rs 2,290 crore, much lower than consensus estimates of Rs 2,407 crore as well as Rs 2,511 crore in the year-ago period.

The Ebitda margins declined 190 basis points to 11.3 per cent. However, L&T's chief financial officer, R Shankar Raman, said, "The Q1 margins were not reflective of year to be fanned out.''

According to Shankar Raman, the working capital stood at 25 per cent of the revenue. ''It has been for last three quarters. It was 23 per cent in December, stayed in March and almost same in June. We are looking forward to 22-23 per cent and bring it down at the earliest,'' he added.

The company's stock ended at Rs 1,789.55, up 0.75 per cent on the bourses on Friday.