L&T net jumps 46%

Mumbai, July 29: Engineering major Larsen & Toubro's June-quarter net profit increased 45.51 per cent to Rs 609.6 crore from Rs 418.94 crore a year ago on the back of an improved performance in various segments.

Total income during the quarter rose 9.10 per cent to Rs 21,873.8 crore from Rs 20,048.24 crore a year ago. Total expenses were higher at Rs 20,434 crore compared with Rs 18,873 crore a year ago.

"The revenue growth was driven mainly by infrastructure, power and services segments. Revenues from international business grew 18 per cent to Rs 7,622 crore during the period, which was nearly 35 per cent of the total revenues," group chief financial officer R. Shankar Raman said.

L&T bagged fresh orders worth Rs 29,702 crore at a consolidated level in the first quarter, a rise 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 mainly from the hydrocarbon business where we bagged a large order from Saudi Arabia," he said.

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

Consolidated order book of the group stood at Rs 2,57,427 crore as on June 30, up 8 per cent year-on-year. International order book constituted 29 per cent of the total order book.

The company said pick-up in investment was crucial to sustain economic growth in the medium and long-term.

"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," it said.

Good progress of monsoon and pay revisions for government employees are expected to spur household demand, L&T said.

"The intent of the government to pursue economic reforms is visible through the passage of bankruptcy code, as well as efforts to build a consensus on GST bill and attract foreign investments to make India a hi-tech manufacturing hub," it added.

The government's initiatives to develop smart cities, build robust infrastructure through rail corridors, metro rails and roads, focus on defence manufacturing, increased outlays for augmentation of water resources and renewable energy augur well for the company.

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

The company has recently finalised its strategic plan for five years with a focus on profitable growth. It remains well placed to benefit from emerging opportunities with its execution capabilities and leadership position in various sectors.

The shares of the company today fell 1.20 per cent to settle at Rs 1,558 apiece on the BSE.

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