L&T reports 16.48% increase in its consolidated net profit in Q3

Infrastructure and engineering conglomerate Larsen & Toubro (L&T) on Wednesday reported a 16.48 per cent increase in its consolidated net profit for the quarter ended December at Rs2,751.66 crore.

It includes the profits from both continuing and discontinued operations. During the October-December period of financial year 2018-19, the company had reported a consolidated net profit from both continuing and discontinued operations of Rs2,362.28 crore.

During the quarter ended December, the company recorded a total income of Rs36,717.60 crore, higher by 5.4 per cent from Rs34,823.08 crore earned during the corresponding period of the last fiscal.

In a regulatory filing, the company said that for the nine months ended Dec.31, 2019, overall profit after tax including the discontinued operations was Rs6,352 crore with an increase of 15.8 per cent over the profits for the same period last year.

On its infrastructure segment, the company said that in this, the company secured orders of Rs28,115 crore, during the quarter ended Dec.31, 2019, registering growth of 28 per cent compared to previous year.

Order wins were mainly in power transmission and distribution business, industrial water systems, network management system and Freight facility package. International orders at Rs11,595 crore constituted 41 per cent of the total order inflow of the segment during the quarter, with large value order wins in Africa and Middle East.

Larsen & Toubro maintained its guidance for 2019-20 despite a muted performance in the fiscal third quarter, when its results were hurt by a slowdown in contract execution and weak order intake.

The engineering major said the business environment continued to be challenging, but its performance in the first six months of the year and an expected pickup in the fourth quarter, traditionally the strongest, gave it the confidence that it would be able to meet the targets of 10-12 per cent growth in order inflows and 12-15 per cent increase in revenue for the fiscal year. Analysts had predicted that the company may slash its order intake guidance.

“Economic growth has slowed down considerably; we are talking sub-5 per cent as per current assessment. That’s not good news for companies like us, which depend on investment,” chief financial officer R Shankar Raman said. “But the good part of the situation is the opportunities are not disappearing. The prospect and the potential that the company is looking at continues to stay very encouraging.”

L&T reported a net profit, including the contribution of discontinued operations, of Rs 2,352 crore, up 15.2 per cent on year. Consolidated revenue grew a moderate 6 per cent to Rs 36,243 crore, weighed by a decline in revenue at its biggest business vertical - infrastructure. Construction work at some of the company’s big infrastructure projects were halted during the quarter. Infrastructure segment revenue declined 5 per cent yearon-year to Rs 17,249 crore in the quarter. The key revenue drivers in the quarter were the hydrocarbon business, information technology and technology services.

“We had an unprecedented situation this year; due to pollution, work in the National Capital Region had a total stoppage for 45 to 60 days. Due to changes in governments and reviews of orders that we have in Andhra Pradesh, we could not proceed there as we originally planned. And the Mumbai area, two of the major projects that we’re doing were stopped due to legal and technical issues,” SN Subrahmanyan, its chief executive officer and managing director, told reporters.

Meanwhile the construction major Larsen and Toubro’s (L&T) Technology Services arm said it bagged a multi-million dollar project from an European firm to provide engineering, procurement and construction management services.

L&T Technology Services Limited (LTTS), a global pure-play engineering services company, won a multi-million dollar project from one of the world’s top plastics, chemicals and refining manufacturers, to deliver the entire spectrum of Engineering, Procurement and Construction Management (EPCM) services for the expansion of an existing site in Europe. With over a decade of engineering, manufacturing and construction expertise, LTTS helps customers achieve operational excellence and maximise efficiencies by delivering a complete Engineering, Procurement & Construction Management services package.

The expansion project will be implemented at the customer’s brownfield plant in Germany over 30 months. As the strategic engineering partner, LTTS will play a key role in executing the entire project through an EPCM model, from procurement and supply chain management support to safety aspects and efficient design.

Agencies