Engineering and construction conglomerate Larsen & Toubro has registered a healthy growth of 47 per cent in order inflow for the quarter ended September 30, 2009, aggregating Rs. 18,365 crore. Gross sales revenue of the company stood at Rs. 7,936 crore for the quarter against Rs. 7,776.21 crore in the year-ago period. The results are not comparable as the corresponding quarter of the previous year had sales of Rs. 275 crore from ready mix concrete (RMC) business. This was subsequently divested.
Excluding the sales from RMC business, sales for the quarter grew by six per cent compared to the year-ago period. The subdued growth was mainly due to delay in clearances from the clients in the case of a few project orders in infrastructure sector and also due to lower offtake of products and machinery during this period. The profit after tax rose by 26 per cent to Rs. 580.40 crore from Rs. 460.26 crore in the same period in the previous year.
The net profit before tax and exceptional items stood at Rs. 954.66 crore against Rs. 771.95 crore. Taxation (net) claimed Rs. 270.68crore (Rs. 230.42 crore). The company has stated that exceptional items consisted of a gain of Rs. 67.61 crore on sales of company’s stake in an associate company and a provision for diminution of Rs. 40.23 crore in investment in another associate company. The profit after tax stood at Rs. 580.40 crore against Rs. 460.26 crore in the same period in the previous year.
Buoyed by the accelerated infrastructure-building initiative of the Central Government, the E&C (engineering and construction) segment reported a healthy growth in order inflow at Rs. 17,004 crore during the quarter. Large orders from the hydrocarbon and power sectors enabled the segment to register a record 63 per cent growth in order inflow year-on-year.
The segment witnessed some recovery in the otherwise sluggish demand for its products, in line with the infrastructure spending ramp up and revival of core industrial sectors. The gross customer revenue of the segment for the quarter at Rs. 693 crore was marginally lower when compared with the revenue of the corresponding quarter of the previous year. However, the segment succeeded in improving its operating margin by 4 percentage point to 17.1 per cent, due to lower input prices and better product-mix.
Gross customer revenue of machinery and industrial products segment for the quarter remained subdued at Rs. 501 crore on the back of depressed demand. Though recovery signs were seen in the construction equipment business, margins were under strain due to intense competition and persistent demand of customers for higher discounts in prices. The economy has started showing signs of recovery providing the much needed boost to the investment climate and spurring the demand for capital goods, according to a company release. With the infrastructure sector seeing government’s deep commitment to encourage fast-track development and attract private investment and the increasing private sector investment in power segment the company is poised to exploit these emerging opportunities to the fullest extent, says the release.