Beating market expectations, engineering and construction major Larsen & Toubro (L&T) on Monday registered better than expected Q4 numbers that sent its shares soaring 5% in a weak market.
L&T witnessed 44% rise in its standalone net profit to Rs 1,438.30 crore for the fourth quarter ended March 31, 2010, against Rs 998.52 crore in the corresponding quarter last year. The company’s net sales (excluding RMC) during the quarter under review surged 28% to Rs 13,374.89 crore, on pick up in order, compared to Rs 10,468.98 crore in Q4 FY 2009.
L&T’s order inflow during the quarter jumped 90% to Rs 23,843 crore, contributed sectors including hydrocarbon, fertiliser, defence, buildings and industries.
During the current year, the company expects its order inflow to increase by about 25%, along with revenue growth of 20%.
“The year ahead is more competitive and challenging. There would be pressure on margins, but we would be working on it. Moreover, we are optimistic on growth coming from power, hydrocarbon and infrastructure sectors during the current year (FY 2011),” said AM Naik, CMD of the company. The company has earmarked a capex of Rs 2,000-3,000 crore for FY 11. It will hire about 7,000 people during the current year especially for power and shipbuilding.
The operating margin of the company for the year under review stood at 13.1%, improved by 140 basis points over the previous year.
Fin arm to go public soon
L&T on Monday said it is considering to list its wholly-owned unit L&T Finance in this financial year. “We are seriously looking at listing L&T Finance this year, however L&T Infotech may take two-three years time before we go for listing,” said L&T CMD AM Naik.
According to L&T whole time director and CFO YM Deosthalee, the company is looking at various options for unlocking value of this business. “One of the options we are looking at is an initial public offer. We might also look at private equity or merger with another non-banking finance company,” he adds.
L&T Finance offers a spectrum of financial products and services for trade, industry and agriculture. The company’s focus segments are corporate products, construction equipment, CVs and tractor.
