L&T Q3 net vaults 39% to Rs972 cr despite subdued business

Engineering and construction giant Larsen & Toubro Ltd has reported consolidated net (after-tax) profit of Rs972 crore for the quarter ended 31 December 2016, a 39 per cent year-on-year increase from the net profit for the previous year quarter.

Consolidated gross revenue for the October-December 2016-17 quarter increased 1.4 per cent year-on-year to Rs26,287 crore from Rs25,928.07 crore in the same quarter of the previous year.

Revenue from international operations during the quarter rose to Rs9,590, constituting 36 per cent of the total revenue for the quarter.

Consolidated net profit for the nine months period ended 31 December 2016 stood 59 per cent high at Rs3,017 crore, compared to Rs1,898 crore recorded for the corresponding period of the previous year.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 18.65 per cent to Rs2,522.70 crore, compared to Rs2,126.04 crore year-on-year. EBITDA margins stood at 9.59 per cent during the quarter compared to 8.19 per cent in the corresponding quarter last year.

For the first nine months of the fiscal (April-December 2016-17) L&T's consolidated gross revenue stood at Rs73,183 crore, recording an year-on-year increase of 5.9 per cent.

The company secured fresh orders worth Rs34,885 crore at the group level during the quarter ended 31 December 2016, a 10 per cent increase year-on-year amid subdued business environment. The international orders at Rs11,865 crore constituted 34 per cent of the total order inflow.

Consolidated order inflow stood at Rs34,885 crore during the third quarter, 10 per cent lower on a year-on-year basis. At Rs11,865 crore, international orders constituted 34 per cent of the total order inflow in the December quarter.

The consolidated order book grew 1.4 per cent to more than Rs2,58,585 crore, of which international orders constituted 29 per cent.

On a cumulative basis, L&T's order inflow for the nine months period ended 31 December 2016 stood at Rs95,706 crore. Major orders were in the infrastructure and hydrocarbon segments.

Consolidated order book of the group stood healthy at Rs258,585 crore as of 31 December 2016, higher by 1.4 per cent year-on-year. International order book constituted 29 per cent of the total order book.

Revenues in the infrastructure segment grew 6 per cent year-on-year to Rs12,467 crore. The company attributed the delay in execution of orders, especially in the buildings and factories business, to the government's demonetisation decision. Thirty-seven per cent of the infrastructure revenue came from the international business. Order book of the infrastructure segment grew 2 per cent annually and stood at Rs1,94,315 crore.

Revenues from the power segment declined 23 per cent compared to last year to Rs1,633 crore. The segment secured fresh orders worth Rs297 crore during the quarter gone by.

Revenues from the hydrocarbon segment grew 14 per cent over a year ago to Rs2,398 crore. Fifty-two per cent of the revenue in this segment came from the international business. Fresh orders worth Rs2,638 crore during the December quarter. The total order book for the segment grew 57 per cent to Rs20,375 crore.

The heavy engineering segment reported revenue of Rs798 crore, a decline of 8 per cent from last year. The segment secured fresh orders worth Rs601 crore, while the total order book stood at Rs7,494 crore as of 31 December 2016.

Demonetisation has caused disruption and the impact on business sentiment is yet to be 'conclusively assessed,' the company said in a statement. The company continues to expect challenging business conditions over the next few quarters due to a slow recovery in private investments.

The challenging business conditions are expected to continue in the next few quarters until the government moves to lift growth through infrastructure spend and as tax reforms take effect.

The company's focus will remain on selective pursuit of opportunities, working capital reduction, cost optimization through supply chain efficiencies, and productivity enhancement through digitisation initiatives. Aided by these initiatives, the company is hopeful of a satisfactory performance given the current business environment.