Infrastructure major Larsen and Toubro on Monday said it was looking at more orders from international markets, including West Asia and East Asian countries, where it already has a presence.
Around 20 per cent of orders that the company had bagged in the June quarter, were from international destinations. The contribution of international orders has grown by over 4-5 per cent this quarter and is likely to rise further.
“During the year, it will grow further,” said Venkataraman, president, operations of Larsen & Tourbro. "But we have to stabilise there first.”
Yesterday, the company bagged two orders of around $639 million (Rs 2,869 crore) from Thailand and is hoping to get more orders from Saudi Arabia, Qatar, and Iraq, among other countries in South Asia. The infrastructure major expects spending to go up in the hydrocarbon sector across the region.
The announcement comes at a time when the industry is facing a slowdown in orders. In the April-June quarter, the company reported a four per cent rise in order inflow. In the previous quarter, the company had announced a 15 per cent growth in its annual order inflow.
“It is most reassuring that we have booked orders worth Rs 16,190 crore, and this is much higher than what we had estimated in the first quarter. We are reasonably comfortable considering that the sector has been dull for the last one year,” said Y M Deosthalee, the group chief financial officer of L&T. The total order backlog of the company is around Rs 1.36 lakh crore.
Analysts said the last quarter had been very tough for infrastructure companies. “The growth in order inflow is in line with our expectations. There are some companies which have seen hardly any orders,” said Shailesh Kanani, research analyst at Angel Broking.
In spite of slowdown fears, the company said it was not changing its earnings forecast for the year — a 25 per cent rise in sales, annually, and stable margins with the possibility of a dip of 50-75 basis points.
The company reported 21 per cent growth in net sales to Rs 9,482 crore, compared to Rs 7,831 crore in the year-ago period. Its net profit grew by 12 per cent to Rs 746 crore from Rs 666 crore in the corresponding quarter last year. Its margins, however, dipped by 0.9 per cent to 11.9 per cent, on account of increased hirings and salary re-structuring of its employees.
“Our sales are very much in line with our guidance, it also shows that the execution is on track for major projects,” said Deosthalee.
Deosthalee to be new CMD of L&T Finance
Y M Deosthalee, got a sentimental goodbye after he presided over his last quarterly earnings press conference, as the company’s chief financial officer. He will take over as the chairman and managing director of the soon-to-be-listed Larsen & Toubro Finance Holdings (LTFHL) with effect from September 6.
“Y M Deosthalee’s appointment as CMD of LTFHL will be effective from September 6, consequent upon his retirement from the services of the company at the close of workings hours of September 5. He will continue to be the chief financial officer and whole-time director till September 5,” L&T said in a communication to the stock exchanges.
R Shankar Raman will take over as the new CFO.
