Larsen & Toubro Ltd. (L&T) on Wednesday reported second-quarter consolidated net profit more than doubled to ₹5,520 crore, from ₹2,527 crore in the year-earlier period. The 118% jump in profit was on account of exceptional gains from the disinvestment of the electrical and automation business during the quarter.
Excluding the exceptional item, profit was ₹1,410 crore, a 45% decline from ₹2,552 crore in the year-earlier quarter.
“PAT was impacted mainly due to the lower revenue, higher credit provisions in the financial services business and disruption of the Metro services,” L&T said in a regulatory filing.
Consolidated revenue slid 12% to ₹31,035 crore.
The company has declared a special dividend of ₹18 per equity share “to mark the successful completion of the divestment”.
International revenues during the quarter at ₹12,148 crore constituted 39% of the total revenue, it said.
The company bagged orders worth ₹ 28,039 crore at the Group level during the quarter, down 42%, on account of deferment of award decisions largely caused by the pandemic, it said.
International orders during the quarter constituted 36% of the total order inflow.
The consolidated order book of the Group stood at ₹ 298,856 crore with international order book constituting 24% of the total order book
Exceptional items during the quarter comprises of impairment of funded exposure in the heavy forgings facility joint venture and impairment of assets in the power development business, it said.
Commenting on the result, R. Shankar Raman, Group Chief Financial Officer, L&T said, “The turnaround is still in progress and order book has been stable. As compared to the previous quarter we have seen some recovery and most of the new orders came from the infrastructure sector, mostly from the government.”
He said the government was active in placing orders in the areas of water supply, power transmission, metros, railways, roads and express ways. However the company’s power generation and hydrocarbon businesses remained impacted.
During the quarter, the company achieved the completion of divestment of its Electrical & Automation business to Schneider Electric (SE), France, and transferred the business to Schneider on receipt of consideration on August 31, 2020.
Net profit after tax from discontinued operations for the quarter comprised profits of Electrical & Automation (E&A) business till the date of divestment to Schneider Electric (SE) on August 31, 2020 amounting to ₹ 45 crore and gain of ₹ 8,101 crore (net of tax) on conclusion of divestment of the business.
“The gain has been computed based on consideration accrued as per the terms of the respective agreements and is subject to post transaction closing adjustments in subsequent quarters,” the company said.
On the outlook, the company said strong emphasis by the government on infrastructure spending would augur well for the company. “If the current moderation in new COVID-19 cases is sustained, and with increased efforts for launch of effective vaccines, recovery could gather pace and yield a possible GDP upgrade over the next year or two,” it said.
