Larsen and Toubro (L&T), the engineering and construction giant, has posted a 3.29 per cent rise in net profit at Rs 998.52 crore during the quarter ended March 2009, weighed down by a provision of Rs 186.28 crore for its investment in Satyam Computer Services. Total income increased 23.96 per cent to Rs 10,605.16 crore.
“In the last six months of last fiscal, the Indian economy was under tremendous stress following the downturn and the demand slump. During the period, the government’s investments in infrastructure projects also slowed down because of election. However, L&T managed to maintain its growth, ensuring future revenue with a 25 per cent rise in order book at Rs 70,000 crore,” said AM Naik, chairman and managing director, L&T.
Naik added that the liquidity condition in the country has improved in the last few weeks. The financial and labour reforms, revision in foreign direct investment (FDI) norms, move to divest government’s equity in public sector firms and increased interest of government to fund infrastructure projects would revive the economy by July-August, said Naik.
The board has recommended dividend of Rs 10.50 a share.
L&T’s gross sales has risen 23.31 per cent to Rs 10,576.56 crore in the fourth quarter with the support of inclusive growth in its core business-- engineering and construction (E&C). The revenue from E&C segment has jumped 38.28 per cent to Rs 9437.35 crore when the infrastructure projects were put on hold world wide after tight liquidity. The expenditure rose 22.44 per cent to Rs 9107.07 crore during fourth quarter.
A provision for Rs 186.28 crore against purchase of 12 per cent stake in Satyam at an average price of Rs 82 a share has dented the company’s bottomline. Considering the takeover offer price of Rs 58 a share by Tech Mahindra, the company has provisioned the amount, said YM Deosthalee, chief financial officer, L&T.
