L&T net up 50% on order boost

Larsen & Toubro (L&T), the country's largest engineering company, today announced a better-than-expected 50 per cent rise in its fourth quarter profit due to more orders from West Asia.

The company posted a net profit of Rs 700.77 crore in the quarter ended March, 2007, 50 per cent higher over the corresponding previous period's Rs 466.85 crore.

Net income, during the period, went up 35 per cent to Rs 6,248.24 crore from Rs 4,616.98 crore. Analysts expected net profit to rise to around Rs 520 crore. The L&T board at its meeting today recommended a final dividend of Rs 2 per share. Taking into account the interim dividend of Rs 11 which the company announced in March, the total dividend payout works out to Rs 13 for the last financial year. The face value of L&T share is Rs 2. In 2005-06, the company distributed dividend of Rs 22 per share, prior to the 1:1 bonus issue.

The share price of L& T today rose 4 per cent to close at Rs 1856.50 on the BSE.

Chairman and managing director A M Naik said the company was confident to sustain the growth momentum on sales as well as profitability on the back of a healthy order book position. The company's order book stands at over Rs 35,000 crore

He added that the company would spend Rs 2,500 crore on expansion of capacity this year. "To cope up with increased demand for our products is the only challenge," he added.

This would be met by a combination of internal accruals and borrowings. Y M Deosthalee, chief financial officer, said the company had Rs 1,000 crore invested in liquid instruments and would borrow another Rs 1,000 crore. The balance would be generated from internal accruals. For the year ended March 31, 2007, net profit (after extraordinary items) grew 39 per cent to Rs 1,403.02 crore from Rs 1,012.14 crore in 2005-06, while the growth in net profit (before extraordinary items) was 49 per cent.

Net sales, during the year, increased 19 per cent to Rs 17,578.84 crore from Rs 14,734.80 crore.

In the consolidated results for the year ended March 31, 2007, net profit was Rs 2,240.14 crore, 70 per cent higher over previous year's Rs 1,317.21 crore. Net income increased 23 per cent from Rs 16500.19 crore to Rs 20347.85 crore.