Engineering and construction major Larsen & Toubro Ltd (L&T) has posted a 218% rise in net profit to Rs 1,598 crore for the quarter ended June 30, 2009, as compared to Rs 502 crore recorded during the corresponding quarter of the previous fiscal. The numbers include an exceptional gain of
Rs 1,020 crore on divestment of the company’s entire stake in Ultratech Cement Ltd. Excluding this, net profit stood at Rs 578 crore, an increase of 13% year on year.
The company reported gross sales revenues of Rs 7,431 crore for the quarter under. The year-ago period had witnessed sales of Rs 269 crore from ready mix concrete (RMC) business, which was subsequently divested during the second half of 2008-09.
R Shankar Raman, executive vice-president-finance, told reporters here on Thursday, ?Even as the Indian capital goods and infrastructure sectors await an acceleration of investments into the core and other growth inducing areas of the economy, the company was able to bag fresh orders worth Rs 9,571 crore during the quarter. This includes 65% orders from the public sector and the rest from the private sector.?
L&T’s shares were down 3.65% on the Bombay Stock Exchange to close at Rs 1,378 on Thursday.
According to Raman, L&T had charted out long-term investment plans to the tune of Rs 12,500 crore for the next three to four years. Of that, Rs 1,500 crore will be invested in the current year. “With crude oil prices showing signs of hardening, renewed interest is expected in oil exploration and production not only in the country but also in the Gulf. In the following quarter, L&T is planning
to venture into development of oil wells in and near the shores. Besides, L&T expects to bag major orders from ONGC. ONGC is planning to redevelop its 14 oil wells and L&T will be participating in the bid to undertake the refurbishing project,” he added.
Infrastructure building activities, which severely suffered in the Gulf countries, is likely to revive and generate good business potential for the company. In order to undertake new offshore infrastructure projects, the company plans to foray into developing markets such as Africa and aggressively focus on the Middle East.
Raman said: “The rule of the land in these markets is that after partnering with local companies, development of new infrastructure projects are handed over to offshore companies. In this financial year, after having partnered with local companies in these markets, L&T expects that the new infrastructure development projects would be handed over to L&T for execution.”
During the quarter, the engineering & construction segment of L&T registered an order flow of Rs 8,373 crore.
Though lower compared to the previous year, it was a creditable achievement considering the stymied investment climate and delay in finalisation of several projects sponsored by the government.
The electrical and electronics (E&E) segment at Rs 576 crore for the quarter ended June 30, 2009 was at par with the corresponding quarter.
As a result of the recessionary trend witnessed in the manufacturing and the industrial sectors, the machinery and industrial products segment achieved lower revenue at Rs 437 crore during the quarter under review.