L&T Q2 net up 32%

The firm maintains full-year revenue growth guidance at 12%; trims order inflow guidance to marginal y-o-y growth for FY18

Infrastructure giant Larsen & Toubro (L&T) reported a consolidated net profit after accounting for losses in joint ventures and associates of Rs 2,020 crore in September quarter, up 32 percent increase from the corresponding period last year.

Though the company’s topline in the period under review stood at Rs 26,447 crore, up 6 per cent from the corresponding period last year, the management has maintained the full-year revenue growth guidance for the current fiscal.

There was an exceptional item on account of divestment of a subsidiary of Rs 136.7 crore in Q2 FY18. In the previous corresponding quarter, the exceptional item had aided the pre-tax profit by Rs 402 crore.

L&T secured orders worth Rs 28,732 crore during the quarter, down 8 per cent on year-on-year basis amidst subdued business environment, policy uncertainties and delayed implementation. On a cumulative basis, the order inflow for Q2 was at Rs 55,084 crore, with major orders from infrastructure and hydrocarbon segments. 

Forty per cent of the orders are from abroad, said the company. The slowdown reflects a “subdued” investment environment as public sector continues to lead in capital expenditure and private firms are “still short of confidence”, said the company statement. Going ahead, the company may fall short of its order inflow guidance for the financial year 2017-18. “Total order inflows may be the same as last year or a bit higher,” informed L&T director and CFO R Shankar Raman at the press meet after the results. The company had earlier given an order inflow guidance of 12-14 per cent growth over FY17.

“Around 49 percent of the order that we have won, worth Rs 55,100 crore, have come from infrastructure, straddling a couple of areas like transport, transmission infrastructure, water, heavy civil etc,” he said.

The company’s EBITDA grew by 27.9 per cent year-on-year to Rs 2,960 crore and margin expanded by 190 basis points to 11.2 per cent in the second quarter of FY18. On the outlook, L&T said the government’s determined efforts to revive the investment sentiment while undertaking impactful economic reforms have expectedly caused transition challenges.

“While the potential for investment in growth remains compelling, the readjustment to the continuing impact of currency purge and the accelerated implementation of GST has upset business environment and tripped growth in an economy already beset with twin challenges of attracting investments and adhering to fiscal rectitude,” it said.