Engineering and construction major Larsen & Toubro (L&T) reported consolidated net profit for the second quarter ended September 30, 2015, has gone up by 16 per cent to Rs.996 crore compared to Rs.840 crore in the same period last year.
“The growth in profit was primarily on account of exceptional gains of Rs.309 crore due to the disinvestment of L&T’s 5 per cent stake in L&T Finance Holdings and sale of stake in one of its vendor’s firms,” R. Shankar Raman, Chief Financial Officer (CFO) L&T said.
He said though the domestic macro-economic parameters showed some early indications of recovery due to various initiatives of the government including reforms and increased public expenditure, the financial markets remained volatile and the overall investment climate stayed subdued.
Considering that the economic recovery is taking more time than expected due to various procedural delays, L&T has scaled down its earlier revenue guidance from 15 per cent to around 12 per cent.
“Domestic revenues have not shown any tendency of picking up. We would be short of guidance at the end of this financial year,” Mr. Raman added.
Elaborating L&T’s Deputy Managing Director & President S.N. Subrahmanyan said: “At the beginning of the year we were optimistic. Now we see off-shoots of revival in several fronts but certain issues like the land acquisition need to be sorted out. Even if the intent of the government is positive and many decisions have been taken, the processes are taking time. This is something one cannot get away with.”
L&T said the ground level inputs indicate that it may take further time for significant pick-up in business opportunities. Given its large order book, the company said it is now focusing on profitable executions as its business strategy.
During the quarter the company’s net sales income has gone up by 11 per cent to Rs.23,393 crore compared to Rs.21,159 crore in the same period last year.
The company secured fresh orders worth Rs.28,620 crore at the group level during the quarter. International order inflow during the quarter at Rs.10,973 crore constituted 38 per cent of the total order inflow. Major orders during the quarter were secured by the infrastructure segment.
The infrastructure segment achieved revenue of Rs.10,668 crore, registering year on year growth of 11 per cent.
The power segment recorded customer revenue of Rs.1,404 crore, up 21 per cent over the same period last year. Customer revenue of the metallurgical & material handling segment showed a decline of 27 per cent to Rs.568 crore.
The heavy engineering segment achieved revenue of Rs.630 crore, down 22 per cent from the same period last year mainly on account of delay in receipt of orders, reduced opening order book and slower progress of jobs under execution.
The electrical and automation division reported revenue of Rs.1,198 crore, down 1 per cent while the hydrocarbon segment reported 7 per cent year-on-year growth at Rs.1,935 crore in revenue. The Information Technology and Technology Services segment reported 23 per cent growth in revenue at Rs.2,288 crore while the developmental project segment registered a revenue growth of 37 per cent at Rs.1,351 crore. Revenue from the financial services sector grew by 16 per cent to Rs.1,863 crore.
