Engineering and construction major Larsen & Toubro (L&T) has posted a 55% rise in net profit at Rs 2,173 crore for the year ended March 31, 2008, as compared to Rs 1,403 crore recorded during the previous corresponding period, on the back of huge orders from the Middle East and booming infrastructure projects within the country. The company also reported a 41% increase in gross sales at Rs 25,187 crore for FY08. The board has declared an issue of bonus equity shares in the ratio of 1:1.

L&T also incurred losses from hedging commodity prices. “An amount of Rs 171.53 crore (net) has been charged to independent financials, as a result of fair valuation of outstanding derivative contracts. In addition, a net amount of Rs 90.22 crore has been charged on this account by group companies, and considered in the consolidated financials,” the company said. The L&T stock rose 6.64% on the BSE on Thursday to close at Rs 2,889.10.

Fourth-quarter profit included a one-time gain of Rs 87.23 crore from stake sales in units.

For the fourth quarter, L&T has posted a 38% rise in net profit at Rs 967 crore, as compared to Rs 701 crore in Q4, FY 07. Excluding exceptional gains, PAT for the quarter grew by 51.6%. The company has reported 34.7% increase in gross sales at Rs 8,578 crore.

AM Naik, CMD, L&T said, “L&T’s premium market position and delivery leadership have enabled it to report healthy financials for the quarter ended March 31. While order inflow for the quarter registered a growth of 56%, gross sales and service revenue at Rs 8,578 crore for the quarter grew by 34.7%, when compared with the corresponding quarter of the previous year.”

Operating profits for the year at Rs 3,405 crore grew by 54%, which translates into an improvement in the operating margins by 1% point over the previous year. The board of directors has recommended a final dividend of Rs 15 per equity share. Including the interim dividend of Rs 2 per share already paid, the total dividend for the year works out to Rs 17 per equity share.

Naik said, “Our capacity expenditure plan this year is to the tune of Rs 2,500 crore, up from Rs 1,900 crore during the previous corresponding period.” This year, L&T has recently formed an SPV, L&T Seawoods Ltd to handle the ongoing Seawoods Navi Mumbai real estate development.

Naik said, “We aim to make it a world class commercial-cum-residential-cum retail project which will include an underground project as well. L&T Realty is investing Rs 1,800 crore this year. In Chennai, L&T Realty is working closely with Hiranandani Constructions for its township project.?

In the next three years, L&T Realty will be investing Rs 4,000 crore in real estate development.”