Q3 L&T profit increases 53%, gross revenue increases 9.4%

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Mumbai: Engineering firm Larsen and Toubro Ltd (L&T) said on Wednesday its net profit for the December quarter was up 53% from a year ago as revenue rose on higher orders infrastructure and hydrocarbon companies.

The company reported a 38% year-over-year increase in new orders for the third fiscal quarter and reiterated its forecast for revenue growth of 12% for the current fiscal year.

Consolidated net profit for the quarter ended December 31 rose to Rs 1,490 crore from Rs 972 crore a year earlier. Gross revenue increased by 9.4% to Rs 28,747 crore.

A survey of 17 analysts on Bloomberg expected L&T to report consolidated net profit of Rs 1,393.70 crore while 18 analysts expected net sales of Rs 28,424.80 crore.

L&T won new orders worth Rs48,130 crore in the quarter, up 38%.

International orders at Rs8,835 crore constituted 18% of the total order inflow. A significant portion of the increase in incoming orders is due to a 70% increase in domestic orders.

Growth in order intake was driven by the infrastructure and hydrocarbons segments.

The increase in order intake was a “welcome relief” for the company, said R. Shankar Raman, chief financial officer of the Mumbai-based company. “If we don’t operate like this, we will be very disappointed.”

He stopped short of calling it a full-fledged recovery in capital investment. India’s economy is facing the worst slowdown in at least half a decade as investment demand lags.

The economic survey released on Monday also pointed out that the downturn in investment in the country has lasted exceptionally long and may not be over yet.

“We seem to be on the right side of the table. The welcome relief comes from the context in which things are moving forward. Now, whether this is sustainable, we will have to wait and watch,” said Raman of L&T.

He also added that tax reforms in the United States, the Middle East and elsewhere are resetting the global competitive landscape, presenting further challenges for the engineering company.

At the end of December, L&T’s order book stood at 2.7 trillion rupees, up 4.7% from a year ago. The company’s earnings before interest, taxes, depreciation and amortization or Ebitda jumped about 600 basis points to 31.4%.

On Wednesday, L&T shares closed down 0.87% at 1,416.60 rupees on BSE, while the stock exchange’s benchmark Sensex fell 0.19%. The company’s earnings were released after market hours.

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