Rising costs pull down L&T profit 205%

Larsen & Tourbo (L&T) has posted a 205.96 per cent decline in net profit at Rs 143.05 crore for the second quarter ended September 2005 of FY06 compared with Rs 437.69 in the previous corresponding period. Net sales rose by 12.85 per cent to Rs 3,345 crore for the quarter from Rs 2,964 crore in the previous corresponding period.

The unimpressive show during the second quarter was a combination of factors namely reduction in other income, rise in input costs as well as higher operational expenses. Other income fell to Rs 197.31 crore in the July-September' 05 from Rs 416.75 crore in July-September'04.

L&T sold its stake in L&T-John Deere, while it sold its cement business, which later was christened UltraTech Cement, in the corresponding previous year. Expenditure such as construction material cost and sales and administration expenses have gone up by more than 50 per cent during the quarter.

Sub-contracting charges grew by 17.86 per cent to Rs 710.37 crore in the quarter under review.

However, L&T managed to bring down consumption of raw materials by 18.72 per cent to Rs 899.52 crore for the quarter ended September 2005. For the half year ended, September 30, 2005, L&T's net profit has declined 108.93 per cent to Rs 247.84 crore from Rs 517.82 crore. Net sales grew by 15.21 per cent to Rs 6,456.73 crore in the quarter against Rs 5,604.04 crore, registered in the previous corresponding period.

During the quarter ended September 30, 2005, gross revenues from engineering and construction (E&C) division grew to Rs 2,796 crore, a 9.2 per cent growth over Rs 2,560.46 crore clocked in the previous corresponding period.

Gross revenues from the electrical and electronics segment grew to Rs 389.54 crore, a 29.50 per cent growth over Rs 300.81 crore registered a year ago.