On a consolidated level, Larsen & Toubro (L&T) reported a 68.37% decline in net profit to Rs 536.88 crore in Q1 June 2020 from Rs 1697.62 crore in the same period last year.
Profit was impacted mainly due to lower revenue, credit provisions in financial services business and under recovery of overheads. The company reported exceptional gain of Rs 224.72 crore in Q1 June 2020 on divestment of wealth management business.
Profit before tax (before exceptional item) tumbled 74.78% to Rs 669.74 crore in Q1 June 2020 over Q1 June 2019. Total tax expense for Q1 June 2020 declined 67.7% year on year to Rs 256.44 crore in Q1 June 2020.
Revenue from operations stood at Rs 21,259.97 in Q1 June 2020, declining 28.2% from Rs 29,635.95 crore in Q1 June 2019. Revenue was impacted by nation-wide lockdown, resulting in halting of manufacturing and construction activities, non-availability of labour and disruptions to the supply chain ecosystem. International revenues during the quarter at Rs 9,497crore constituted 45% of the total revenue, with increased composition of the non-cyclical IT&TS segment.
The engineering and construction major bagged orders worth Rs 23,574 crore at the group level during the quarter ended June 2020, registering declineof 39%, in a quarter characterised by low interest towards fresh investment and deferment of award decisions. International orders during the quarter at Rs 8,872 crore constituted 38% of the total order inflow. The consolidated order book of the group stood at Rs 305,083 crore as at 30 June 2020, with international order book constituting 24% of the total order book.
L&T's infrastructure segment secured orders of Rs 11,349 crore, during Q1 June 2020, lower by 32% compared to the corresponding quarter of the previous year. The infra segment order book stood at Rs 221,115 crore as at 30 June 2020, with the international order book constituting 22% of the total order book.
In its outlook, L&T said that with partial lifting of lockdown and graded resumption of business operations, the domestic economy is expected to improve incrementally over the next few quarters. Ordering activity in roads, urban infra particularly health care, railways, Water distribution and waste-water treatment and irrigation sub-segments are expected to pick up in the later part of the fiscal year.
The company said it has been pursuing a multi-pronged strategy to weather the economic crisis and restoring normalcy in business operations, while complying with all governmental directives and measures to ensure safety of its customers, employees and contract staff. Labour availability and productivity, working capital levels, balance sheet health and pick-up in execution pace is constantly monitored. The company's focus continues to be on responsible resumption, profitable execution of its large order book with higher operational efficiencies, liquidity management, tight expense control and successful transitioning to a new work environment.
Shares of L&T closed 1.8% lower at Rs 920.95. The result was announced after market hours today, 22 July 2020.
L&T is an Indian multinational engaged in technology, engineering, construction, manufacturing and financial services.
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