L&T net falls 67% to ₹1,819 cr.
Firm had one-time gain from sale of business in Q2 last year
Larsen & Toubro Ltd. (L&T) reported second-quarter consolidated net profit plunged 67% to ₹1,819.45 crore, from ₹5,520 crore in the year-earlier period when it had a one-time gain from the sale of its electrical & automation business.
“The profit after tax for the quarter at ₹1,819 crore includes ₹144 crore gain on divestment of stake in hydel power plant in Uttarakhand and tax expense of ₹47 crore arising on transfer of the NxT Digital Business from the parent to Mindtree Ltd.,” the company said in a filing.
Consolidated profit after tax (excluding exceptional items and discontinued operations) at ₹1,723 crore, however, surged 56%.
“The growth is mainly driven by higher profits in the IT&TS portfolio and improved margins from the projects & manufacturing portfolio as the pandemic induced stress in previous periods progressively wanes,” CFO R. Shankar Raman said on a conference call.
Revenue rose 12% year-on-year to ₹34,773 crore, with international sales contributing 35% at ₹12,318 crore. L&T bagged orders worth ₹42,140 crore during the quarter, a 50% jump over the year-earlier period.
Orders covered segments including oil & gas, metros, rural water supply, minerals and metal and power transmission and distribution. International orders at ₹22,116 crore accounted for 52%.
The group’s consolidated order book at ₹3,30,541 crore was near record levels, with international orders having a share of 23%.
Infrastructure segment secured orders of ₹12,108 crore, a decline of 17% over the year-earlier period.
The power segment recorded order inflows of ₹143 crore for the quarter reflecting stagnation of fossil fuel power plant prospects, given the ESG concerns, the company said.
The heavy engineering segment recorded an order inflow of ₹648 crore, a doubling over the same period last year with a spurt of orders in the refinery and oil & gas segments.
Defence engineering segment recorded order inflow of ₹441 crore, a decline of 67% year-on-year on account of deferral of ‘awards’.
The hydrocarbon segment secured orders valued at ₹14,503 crore registering significant growth over the corresponding quarter of the previous year.
IT & technology services (IT&TS) segment comprising L&T Infotech, L&T Technology Services and Mindtree recorded customer revenues of ₹7,876 crore, a 28% y-o-y increase reflecting a surge in demand for more technology focused offerings triggered by the pandemic induced changes in client’s business models, the company said.
Financial services segment recorded income from operations at ₹2,976 crore registering a year-on-year drop of 11% on account of a targeted reduction in the loan book.
On the outlook, Mr. Raman said L&T would leverage the strong growth momentum in its IT & TS portfolio and continue to focus on measures including profitable execution of its large projects order book, cost optimisation and release of funds through improved working capital management as well as a phased divestment of non-core assets.
“The company is confident of building on the current business momentum and is committed to creation of sustainable returns to its stakeholders,” he said.