Engineering and construction major Larsen and Toubro (L&T) reported a 15.4% increase in its third quarter net profit to ₹2,560 crore, even as revenue and order-flow growth slowed down.
The profit was reported on a 5.4% growth in revenue during the quarter to ₹36,717.6 crore.
The company won new orders worth ₹41,579 crore during the quarter in a subdued business environment, registering a 2% growth over a year earlier.
Cumulative order flow
On a cumulative basis, the order inflow for the nine- month period ended December 31, 2019 stood at ₹1,28,571 crore, growing at 11% over the corresponding period of the previous year.
“We will meet the order inflow target, sales and profit margins guidance. On the revenue front, the asking rate is not different from last year as we get most of the orders in the last quarter. We expect to be somewhere in the band of the guidance given,” said S.N. Subrahmanyan, MD and CEO, L&T. The consolidated order book of the group stood at ₹3,06,280 crore as at December 31, 2019, registering a growth of 5% over March, 2019. International orders constitute 24% of the total order book.
“This quarter and the last nine months have been very challenging but we were able to deal with the challenges. Economic growth slowed down substantially and if we are to grow at sub-5%, it’s not good news for companies like us that depend upon investments,” said R. Shankar Raman, Group CFO, L&T.
L&T’s revenue from the infrastructure segment fell 5% to ₹17,249 crore during the quarter.
“Challenges faced in projects in Andhra Pradesh and for a short duration in Maharashtra and Delhi, coupled with lower fund allocation in some States adversely impacted the execution progress,” said Mr. Subrahmanyan. The infrastructure segment constitutes almost half of L&T’s order book and revenue.
Power revenue down
The power segment revenue also fell 23% to ₹694 crore during the quarter on a depleted opening order book and new awards are yet to pick up execution momentum.
L&T shares fell 0.64% to ₹1,294.25 on the BSE in a weak Mumbai market on Wednesday, valuing the company at ₹1,81,568.52 crore.
