The country’s largest engineering and construction company by sales, Larsen & Toubro (L&T) on Friday recorded a robust growth in earnings for the quarter ended March 31, and the management indicated that prospects in the current fiscal would be even better with an expected upswing in the infrastructure sector with a new government in place.
L&T’s standalone net profit increased 69% year-on-year to R2,723 crore during the period.
The growth in net profit, which beat Street estimates, was achieved on the back of higher turnover from the infrastructure and heavy engineering businesses and high intake of orders, which was in line with its guidance for 2013-14.
Analysts had estimated L&T’s net to fall around 5% over the year earlier to R1,700 crore during the quarter, while they estimated net sales to go up 3.5% to R20,960 crore.
However, net sales were up 11% year-on-year to R20,079 crore with progress made on various projects under execution. Revenues from L&T’s international business during the quarter stood at R2,966 crore, up 25% over the corresponding period in FY13, and constituted 15% of overall revenues during the quarter.
For all of 2013-14, L&T posted a 14.2% y-o-y rise in consolidated net sales to R85,128 crore, marginally lower than what it had guided. The consolidated net for the year was lower by 6% at R4,902 crore due to cost and time overruns in the hydrocarbons business leading to a decline in margins that affected profitability. L&T met its guidance of a 15% increase in order inflows in 2013-14 over the previous fiscal.
Order inflows for fiscal 2014 stood at Rs 94,108 crore. The firm’s total order book increased by 13% to 1.63 lakh crore as on March 31, after the company removed Rs 15,000 crore worth of orders from its books on account of them being slow-moving.
“Of these, around Rs 9,000 crore of orders were in roads, Rs 3,000 crore in minerals and material handling and about Rs 2,000 crore in other sectors,” R Shankar Raman, chief financial officer, L&T, said. During the fiscal, international orders constituted 21% of the total order book.
For the current financial year, L&T has given a guidance of a 20% increase in order inflows and a 15% increase in revenues.
L&T’s total expenditure for the January-March quarter rose nearly 8% year-on-year to Rs 17,392 crore, with a significant increase of 26% in staff costs as the company inducted 4,000 new people. Annual pay revisions and