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L&T Q1 Net Up 46% To Rs 610 Crore, Total Income Rises 9%

Engineering major Larsen & Toubro has reported a 45.51 per cent increase in net profit at Rs 609.6 crore for the June quarter on the back of improved performance in various segments

Photo Credit : Reuters


Engineering major Larsen & Toubro (L&T) on Friday (29 July) reported a 45.51 per cent increase in net profit at Rs 609.6 crore for the June quarter on the back of improved performance in various segments.

The firm had clocked a net profit of Rs 418.94 crore in the year-ago period. Total income rose 9.10 per cent to Rs 21,873.8 crore in the April-June quarter from Rs 20,048.24 crore during the same period in 2015-16.

"The revenue growth was driven mainly by infra, power and services segments. Revenues from international business grew 18 per cent to Rs 7,622 crore in the quarter, which was nearly 35 per cent of the total revenues," Group Chief Financial Officer R Shankar Raman told reporters here.

The company bagged fresh orders worth Rs 29,702 crore at consolidated level in the first quarter, registering an increase of 14 per cent. International orders at Rs 13,211 crore constituted 44 per cent of the total order inflow.

"Order inflow growth was mainly from hydrocarbon, water, and heavy civil verticals. International order inflow growth was primarily from the hydrocarbon business where we bagged a large order from Saudi Arabia," he said.

Raman said even as the international markets are looking positive in terms of awarding contracts, the domestic space is yet to pick up.

"The domestic capex from the private sector is still muted. The orders are coming largely from the public sector projects. We are bidding for various projects in the roads, railways and water segments. In addition, we will participate in the coastal road and metro projects," he said, adding, "large order book provides multi-year revenue visibility."

The consolidated order book of the group stood at Rs 2,57,427 crore in the first quarter, up 8 per cent y-o-y.

International order book constituted 29 per cent of the total order book.

"The investment climate in India is yet to gather pace, particularly in the private sector. High corporate debt levels, balance sheet challenges of banks, weak industrial and rural demand and sluggish exports are posing hurdles to the investment momentum," Raman added.

Both Central and state governments-led push to capital expenditure holds the key to accelerate the growth engine.

Good progress of monsoon and pay revisions for government employees are expected to spur household demand, he added.

"The government's intent to pursue economic reforms is visible through passage of bankruptcy code as well as efforts to build consensus on GST Bill and attract foreign investments to make India a high-tech manufacturing hub.

"The initiatives for development of smart cities and other infrastructure projects augur well for the company," L&T Deputy Managing Director and President S N Subrahmanyan said.

On the international front, the company will continue to target select prospects in the space of core infrastructure and oil & gas sector in the Middle East (West Asia), Africa and neighbouring countries.

"We have recently finalised our strategic plan for five years with a focus on profitable growth. We remain well placed to benefit from emerging opportunities with execution capabilities and leadership position in various sectors," Subrahmanyan added.


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