Larsen & Toubro, India’s biggest engineering and construction company, on Friday reported a 19% year-on-year rise in consolidated net profits to Rs 1,030 crore for the three months to December.
Larsen & Toubro, India’s biggest engineering and construction company, on Friday reported a 19% year-on-year rise in consolidated net profits to Rs 1,030 crore for the three months to December. The rise came on the back of a slight pick-up in orders from the roads and power transmission sectors. However, operating profit margins came in lower at 10.30% against 12% in Q3FY15, driving down the Ebitda (earnings before interest taxes, depreciation and amortisation) by 8% to Rs 2,650 crore. L&T’s net sales rose just 8% y-o-y to Rs 25,830 crore.
CFO R Shankar Raman said the year was expected to close with order inflows at levels similar to those in FY15 of around Rs 1.55 lakh crore. He told mediapersons it was not without reason the company had got close to Rs 93,000 crore of fresh orders in nine months, in an environment in which there was anxiety on investments and orders.
“There has been some pick-up witnessed in the project awards in sectors such as transportation, power transmission and water programmes are moving forward,” he said.
Raman said a revival in private sector capex was still some time away, even as companies in a few sectors like IT, automobile, construction, healthcare and leisure are continuing to invest. “The private sector will be very careful and only those balance sheets that can afford investment and financial closure will look at this environment little more positively than they did a year ago. Because everybody believes the uptick is around the bend,” he said.
In the September 2015 quarter, the company had scaled down its guidance on order inflow to a 5-7% growth, against the earlier forecast of 10%-15%.
SN Subrahmanyan, deputy managing director and president, L&T said, “Policies are being announced, good intentions are there, the macroeconomic factors are pretty good, what needs to be done is to get the projects initiated. Announcements and intents don’t make projects. It is holding the hand, digging the earth and pouring the concrete that will make projects. I think that is what is seriously lacking and therefore the effort is required to push it.”
The company garnered fresh orders worth Rs 38,528 crore at the group level during the quarter, with international order inflows constituting 29% of the total. Major orders during the quarter were secured by the infrastructure segment. The consolidated order book of the group stood at Rs 2.56 lakh crore, higher by 14% on a y-o-y basis, with the international order book constituting 27% of the same. The L&T share closed up 2.33% at Rs 1,102.20 ahead of the results announcement on Friday on the BSE.