L&T reports 15.2 % rise in consolidated net profit at Rs 2,352.12 crore

Infrastructure behemoth L&T on Wednesday reported a 15.2% rise in its consolidated net profit for the quarter ended December at Rs 2,352.12 crore on an operating revenue of Rs 36,242.68 crore, an increase of 5.86% compared to the same period last year. Order inflows grew 2.46% to Rs 41,579 crore. International orders during the quarter stood at Rs 17,901 crore, having increased to 43% of the total order inflow on large value order wins in power transmission and distribution, and metallurgical and material handling business. Order book at the end of December stood at `3.06 lakh crore, having risen 8.9% from the same period last year.

The group’s earnings before interest tax depreciation and amortisation (Ebitda) jumped 9.8% to Rs4,118 crore during the quarter, while its Ebitda margin improved by 40 basis points to 11.4%. SN Subrahmanyan, MD and CEO, L&T, explained that orders have been taking more time to settle than they normally would. “These are for two particular reasons: one, for very big projects, when we bid, we find that the estimates are slightly higher than the budgets made by the government. Normally, they settle within 10% and sometimes our prices are coming in higher… The authorities are generally reluctant to take a decision on this and sometimes there are scope differences and such. Therefore, what should have got settled legitimately in three months is taking four to five months to settle,” he said.

Subrahmanyan also pointed out that some delays also occurred because of L&T being the sole bidder in certain projects. “If you are a single bidder, there is a CVC guideline which says you have to bid twice and then thrice, and in the third time. if you are again the lone bidder, then they can take it forward, provided you are within the budgetary estimates of the government. So, this is a new phenomenon which we had not anticipated,” he said. He added that big ticket projects that have been announced need to be taken forward at a faster pace.

R Shankar Raman, chief financial officer, said that the group will continue to maintain its full year guidance for order inflows and revenue. “Our fourth quarter has always been the biggest quarter. A lot of efforts happens in the fourth quarter. The asking rate is not anything different from the last year. I think, it is a reasonable expectation that we should be able to keep pace,” he said. L&T has maintained its order inflow guidance at 10-12% higher compared to last year and a 12-15% year-on-year growth in revenue.

L&T said that its infrastructure segment recorded customer revenue of Rs17,249 crore for the quarter-ended December, leading to a y-o-y decline of 5%. “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,” the company said.

At the same time, IT & technology services segment achieved customer revenue of Rs6,090 crore during the quarter, including Rs1,965 crore on account of the Mindtree acquisition. The hydrocarbon segment recorded customer revenue of Rs4,386 crore during the quarter, registering a robust y-o-y growth of 17% on the back of strong execution momentum in onshore vertical.

Raman said that the government should try to implement at least Rs20 lakh crore within a year, from the recently announced Rs102 lakh-crore-worth infrastructure projects to be implemented over the next five years. He added that the Centre needs to address structural issues to boost consumption and private investment.

L&T said it continues to focus on cost efficiencies, resource optimisation, leveraging technology for productivity gains and efficient fund management with the ultimate aim of delivering shareholder value through superior return on equity. Shares of L&T closed Wednesday’s trading session down 0.64% at Rs1,294.25 on the BSE.

Source: Financial Express