Despite a significant drop in orders from the infrastructure sector, engineering conglomerate Larsen & Toubro (L&T) reported an 18 per cent higher net profit for the third quarter of 2011-12 at Rs. 992 crore against Rs. 841 crore in the same quarter in 2010-11.
R.Shankar Raman, Chief Financial Officer, said, the company was finding a strategy to perform in an operating environment characterised by lack of investment momentum for procurement of fresh orders.
L&T reported a 23 per cent increase in net sales at Rs. 13,999 crore (Rs. 11,396 crore). Other income rose by 79 per cent to Rs. 449 crore (Rs. 363 crore) on dividend from subsidiaries and associates and from treasury gains. The operating profit was up nine per cent at Rs. 1,343 crore although operating margin dropped 120 basis points to 9.6 per cent in line with the earlier guidance of a margin drop of 75-150 basis points.
Although the quarter witnessed project deferments, aggressive competition and rupee depreciation Mr. Raman said, ``the most heartening feature is the 28 per cent increase in order intake to Rs. 17,129 crore during the quarter when order book grew 27 per cent to Rs 1,45,768 crore.'' Another feature has been good orders coming from infrastructure sector, although there were no opportunities forthcoming for power generation.
The infrastructure sector contributed 45 per cent of the order flow and 40 per cent of the order book.
K. Venkataramanan, President, Hydrocarbons, said the company was now well established in the Middle East and was now seeking markets in Australia and would look at CIS countries and Africa next year. The company spent around Rs. 1,000 crore as part of capital expenditure during the year. ``We had planned Rs. 2,200-2,400 crore capital expenditure for the fiscal but have rolled back and slowed down plans. We see no spike in capex till things turn robust again,'' said Mr. Raman, adding that the quarterly performance was in line with L&T's guidance of 5 per cent revenue and 15 per cent order book growth for the fiscal.