1. L&T net up 7% on year but misses estimates

L&T net up 7% on year but misses estimates

The country’s biggest engineering and construction firm Larsen & Toubro (L&T) on Monday missed analysts’ estimates by posting a consolidated net profit of R861.75 crore for the July-September quarter, a 7% jump over the same period last fiscal. This was largely on the back of growth in revenues from the infrastructure segment, while the company’s […]

By: | Mumbai | Updated: November 8, 2014 9:53 AM

The country’s biggest engineering and construction firm Larsen & Toubro (L&T) on Monday missed analysts’ estimates by posting a consolidated net profit of R861.75 crore for the July-September quarter, a 7% jump over the same period last fiscal. This was largely on the back of growth in revenues from the infrastructure segment, while the company’s performance in the hydrocarbon, metallurgical and power segments were disappointing during the quarter.

Net sales during the period surged 11% to R21,159 crore on a yearly basis. The company said in its analysts’ presentation that sales growth is still subdued by lower activity levels and challenging execution conditions in the power, metals and hydrocarbon sectors.

Off-Target

The Ebitda margin fell 6.8% (year-on-year) to R2,334 crore and margins declined 210 basis points to 11% during the quarter. International revenue stood at R6,562 crore, which comprised 31% of the total revenue. The company said it secured fresh orders worth R39,797 crore at the consolidated level during the quarter, 17% higher on a y-o-y basis. “The international order inflow for the quarter was R6,756 crore that constituted 17% of the total order inflow. Major orders during the quarter were secured by the infrastructure, power and hydrocarbon segments,” it added.

The consolidated order book of the group increased 14% y-o-y to R214,429 crore as of September 2014. The international order book constituted 27% of the total order book. The company reduced its consolidated revenue guidance for FY15 from 15% growth year-on-year to 10-15% but on order inflows, it maintained the guidance of 20% growth.

Commenting on the macro outlook, which has a bearing on the company’s performance, chief financial officer R Shankar Raman said the domestic business sentiment has improved on high expectations from the new government for reviving the growth momentum. “De-bottlenecking of incomplete infrastructure projects, enabling credit growth and domestic manufacturing appear to be the initial thrust areas. Large greenfield investments in core sectors, however, are expected to take a few more quarters,” he added.

Raman said that consequent to the cost and time overrun provisions made in hydrocarbon business, the margins for FY15 could come in 160-200 basis points lower.

The company had said that it would aim to achieve Ebitda margin levels of 12.3% seen in FY14.

“The notable feature in the order wins during the quarter is there has been a greater percentage of domestic orders, which is a signal of early signs of opportunity emerging in the domestic markets,” Raman said. In the corresponding quarter last year the company had 50% of order inflows from international markets.

Raman also said that power segment has made a “comeback” with some amount of order commencing in the current year and the company has obtained some orders in the domestic market, with a few wins in Madhya Pradesh and from NTPC. “ONGC, which is one of our largest customers in the domestic market, has come back to ordering, which benefited us with the order win, which has increase the order inflow in the hydrocarbon segment also after a brief pause,” he said. The company’s share closed down 0.86% at Rs 1652.80 on the BSE on Friday.

  1. H
    Harry Potter
    Nov 10, 2014 at 4:35 pm
    L&T is on steroids Stake or Post Losses (Deep Sea or Devil) - Dhamra Port stake to Adani, on a look out to offload Rajpura Power Plant nearly 10 crores. Threatened GoT with pullout from Hyderabad Metro - asking for Viability Gap Funding of 3k crores.Post q1 plunge of 8 %, biggest since July 2009. L&T got some good breather. Modi Wave (Make in India, Rock Star at Madison Square), Mars mission (ISRO's FEAT - L&T also piggybacked) - Statue of Unity - kept L&T above 1300. Its reality check now, Devil lies in details - L&T has displa geriatric trait of biting more than they can chew. Hydrocarbon projects losses of 900 cr. Asking GoT to give 'viability gap funding' of 3k crs for Hyderabad Metro. How many farmers get this 'VGF' before committing suicide? L&T top bres were on a selling spree - leading the pack is Mr Naik sold shares worth 70 cr in 20 days - March-2014. How about top 100 L&T executives contributing 30 crs each for this 'VGF' of 3k cr? How many other bidders would have won the contract? Please refer Forbes India articles - "L&T Defence Dilemma" - "L&T armed but not commissioned". 900 cr losses at shipbuilding - 5000 cr of investment in defence at risk - do they want VGF from GoI? Please refer BS articles - "L&T 30,000 crores of international orders at risk" - "why analyst are angry with L&T”. Shall we fear 52 week low this week? L&T is in dire need of Information Age leaders - all above age of 60 should LEAVE - FIX retirement age to 60! Its 75 - why?
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