L&T profit rises 19%, beats Street estimates

Consolidated gross revenue rises 18% to Rs 33,157 crore, with progress in project implementation

Engineering and infrastructure major Larsen & Toubro’s net profit for the quarter ended March rose to  Rs 2,454 crore, up 19 per cent from the Rs 2,070 crore during the corresponding quarter a year before.

Exceptional income of Rs 43 crore helped partly. The company beat the Bloomberg estimate of Rs 1,896 crore.

The board of directors has recommended a dividend of Rs 18.25 a share. The stock closed four per cent higher on the BSE, at Rs 1,291.30.

Earnings before interest, tax, depreciation and amortisation (Ebitda) grew 35 per cent; the Ebitda margin improved from 12.8 per cent a year before to 14.7 per cent in the quarter. The group also won more orders for building roads and power transmission networks.

Consolidated gross revenue rose for the quarter by 18 per cent to Rs 33,157 crore, with progress in project implementation. Nearly 54 per cent of the total revenue was contributed by the infrastructure segment. Order inflow was Rs 43,334 crore, of which a third was of international orders. However, order inflow for the quarter was down seven per cent. Consolidated orders were Rs 249,949 crore at end-March, higher by seven per cent on a year-on-year basis. The international order book constituted 28 per cent of the total.

During the quarter, order inflow from the infrastructure segment was Rs 29,103 crore, a three per cent moderate growth. The power business grew 51 per cent, to Rs 2,185 crore. For FY17, it expects revenue to grow at 12-15 per cent and order inflow at 15 per cent, over FY16.

R Shankar Raman, chief financial officer, told reporters they were confident on growth in the near to medium term and would focus on profitable execution. The hydrocarbons (up 12 per cent), IT (up 13%) and others (up 22 per cent) segments posted growth.

However, metallurgical & material handling (MMH), heavy engineering, and electrical & automation (E&A) segments reported a 3-9 per cent decline in revenues in the March quarter.  

He added  growth momentum in the infrastructure segment rested mainly on government initiatives.

Private sector capital expenditure might take time to revive, as investment sentiment is weak.

In its outlook, the company said it continued its emphasis on operational efficiencies, faster execution of projects on hand and reduced working capital levels. The domestic market continues to hold promise for revival of growth, though private sector and industrial capex is likely to take time to revive. Beside, execution conditions remain challenging -- clients problems in raising finances and slower clearances for land and environment, among others. The banking sector is restricting lending to companies.