Larsen & Toubro (L&T), India’s largest engineering and construction company, said the revenue ramp-up would be gradual, and it will take a few more quarters for the company to get anywhere close to normalcy.
The company said it had lost about Rs 12,500 crores in revenue in Q1FY21 and declined to give guidance on the order book, EBITDA and revenue citing uncertainty.
“It’s still too early to give guidance because we still don’t know what is going to happen,” said S N Subrahmanyan, Chief Executive Officer (CEO) and Managing Director of L&T said in a post-earnings media call.
L&T net profit slumped 79 percent year-on-year to Rs 303 crore as compared to Rs 1,473 crore for the corresponding quarter of the previous year. The Profit After Tax (PAT) was impacted mainly due to lower revenue, credit provisions in the financial services businesses, and under recoveries.
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The company recorded a revenue of Rs 21,260 crore for the quarter ended June 30, 2020, registering a year-on-year decline of 28 percent.
L&T said its revenue was impacted by the nation-wide lockdown imposed due to COVID-19. This resulted in halting of manufacturing and construction activities, non-availability of labor and disruptions to the supply chain ecosystem.
International revenues during the quarter stood at Rs 9,497 crore constituted 45 percent of the total revenue.
In the first quarter, the company won orders worth Rs 23,574 crore.
The company said its order book worth of Rs 3,50,000 crore is workable and the company is keen to get onto the execution mode.
“The first quarter, India went into the most severe lockdown ever in history. Beyond the two and half months of the Central government lockdown, states in South and West India where much of the sites are located have announced lockdown,” Subrahmanyan said.
“It is also a paradox that much of the labour comes from the east that works in these states. We had a situation where we had a huge backlog of orders, much of the backlog couldn’t be taken forward. Some of the works like engineering, some amounts of procurement and planning have made some progress. Again the problem is with govt clients, who are not equipped to work from home to clear files relating to our work orders,” he added.
The company said the work across its 950 sites is resuming, but not at full scale due labour shortages. “In January and February at the peak, we had about 2.5 lakh – 2.6 lakh labourers on our rolls. At the end of May it went down to 70,000 labourers. Now we have brought it back to 1,90,000 labourers. But we are still far away from what we really need.” said Subrahmanyan.
Subrahmanyan said he expects the situation to come back to normalcy in another 45-60 days, but cautions about the possibility of pandemic reasserting.
