Industry

L&T Q4 net profit rises 3% on improved order execution

Building on hope: The rise in Q4 revenue is evidence of ‘return to pre-COVID levels of activity’, the firm says.   | Photo Credit: SIVAKUMAR PV

Larsen a Toubro Ltd (L&T) reported that its fourth quarter consolidated net profit grew 3% to ₹3,293 crore from a year earlier, due to improved execution of orders and better working capital management.

Consolidated revenue increased 8.68% to ₹48,088 crore, evidencing return to pre-COVID levels of activity, the company said.

Consolidated net profit including profit from discontinued operations for the year ended March 31 climbed 21% to ₹11,583 crore, compared with the previous year.

The consolidated net profit included a charge of ₹3,620 crore towards exceptional items and profit from discontinued operations ₹8,238 crore, mainly comprising of gain on disinvestment.

Annual revenue declined to ₹135,979 crore, from ₹145,452 crore in the previous year, due to the impact of lockdowns starting March 2021.

The company said that in FY21, execution activities normalised on easing of COVID-related restrictions, prior to the onset of the second wave of the pandemic.

The board recommended a final dividend of ₹18 per equity share. It had earlier declared ₹18 per equity share as an interim dividend, following the divestment of the Electrical & Automation business.

Even as the severe second wave of the pandemic has posed challenges to economic revival, the company said it was hopeful of achieving growth in FY22, assuming the second wave did not pose any more challenge beyond two months of the current financial year.

“We are looking forward to a growth environment,” R. Shankar Raman, wholetime director and CFO, L&T.“Last year, we had not given any guidance but in FY22 we are looking forward to growth in low to mid teens in order book and revenue. Margins will remain stable if the second wave passes without further damaging beyond one or two months,” he added. “We are looking the year ahead with careful optimism.”

In FY21, the company had received orders worth ₹175,497 crore at the group level, falling 6% compared with the previous year in the face of a COVID-19-disrupted business environment in the first half of the year.

International orders dropped to 27% of the total order inflow to ₹47,951 crore, with subdued overseas opportunities, especially in West Asia, the company said.

The consolidated order book of the group rose 8% to ₹327,354 crore as on March 31 compared with the previous year.

Its infrastructure business reported a 15% decline in revenue to ₹61,431 crore, while revenue from heavy engineering business was down 5% and defence engineering business saw revenue improvement of 43%. The IT & technology services business saw revenue growth of 15% while the financial services business witnessed revenue decline of 3% from the previous year.

As to the outlook, the company said it would continue to aggressively pursue opportunities for growth, both in domestic and international markets. The focus would be on large project wins, efficient execution of its large order book, productive utilisation of its monetary resources, all targeted to ensure a sustainable business model and thereby improved shareholder returns.

It said the investment-focussed Union Budget 2021 and the growth supportive measures taken by the government would lead to economic revival.

It said the ferocious second wave of the pandemic could lead to a temporary slowdown in growth momentum, especially during the first quarter of FY22.

“Once the immediate challenges of shortages in health infrastructure and availability of vaccines get resolved, the economy would once again recover with the resumption of near normalised activity in sectors like agriculture, manufacturing, mining, construction and non-contact based services.” it added.


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Printable version | Jun 24, 2021 3:45:26 AM | https://www.thehindu.com/business/Industry/lt-q4-net-profit-rises-3-on-improved-order-execution/article34560999.ece

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