Larsen & Toubro Ltd. (L&T), on Wednesday, reported a 7 per cent decline in net profit at Rs.1,787.94 crore for the fourth quarter ended March 31, 2013, against Rs.1,920.41 crore in the year-ago period. Net sales improved by 10 per cent to Rs.20,293.83 crore from Rs.18,460.90 crore.
For the year ended March 31, 2013, the net profit grew by 10.2 per cent to Rs.4,910.65 crore from Rs.4,456.50 crore in the previous year. Net sales grew by 14.5 per cent to Rs.60,873.26 crore from Rs.53,170.52 crore. International revenue doubled to Rs.12,110 crore as compared to the previous year.
L&T’s top management said that the fourth quarter results did not give a clear picture about the company’s performance as it was into infrastructure projects which would take three-to-four years to get completed.
Shares take a hit
“We have done remarkably well to stay on course. Our performance should be judged on yearly basis because we are into engineering business,” said L&T Chief Financial Officer R. Shankar Raman. The company’s shares came crashing down as the results were viewed below market expectations. L&T stock witnessed massive selling pressure, and closed with a loss of 5.57 per cent at Rs.1,517.10 on the BSEdespite the company announcing a bonus issue in the ratio of one share for every two shares held (1:2). The company had also recommended a dividend of Rs.18.50 per share.
For the year, the company’s order book increased by 5 per cent to Rs.1,53,604 crore from Rs.1,45,723 crore while the order inflow witnessed a growth of 25 per cent at Rs.88,035 crore against Rs.70,574 crore in the previous year. The order inflow in the fourth quarter grew by 32 per cent to Rs.27,929 crore.
Major orders came during the year from building and factories, power transmission and distribution, transportation infrastructure and power sectors.
Promising outlook
“On a macro level, the country’s growth is expected to be 6 per cent. After the elections, it should go up to 7.5 per cent by March 2015. Overall, I am very cautious. As far as L&T is concerned, I am reasonably optimistic because of the internationalisation it has achieved, and the various businesses it is into. The current year as a whole looks promising for L&T. Order inflow will grow by 20 per cent this year, and top line will grow above 15 per cent,” A. M. Naik, Chairman, said.
“L&T numbers were lower than our expectations. Revenue growth has been mainly driven by exports even as domestic revenue has been flat,” Sanjeev Zarbade, Vice-President-Private Client Group Research, Kotak Securities.
“While reported profit and loss numbers surprised negatively, the order book and guidance for the current financial year remain robust,” Gautam Sinha Roy, Vice-President-Equities, Motilal Oswal Securities, said.
