L&T second-quarter net rockets 357%

BS 200 SCORECARD

Triggered by a massive jump in other income, Larsen & Toubro (L&T) has reported a 357 per cent rise in its net profit for the second quarter ended September 30 at Rs 371.98 crore, up from Rs 81.26 crore in the corresponding quarter of the previous year.

The other income during the period was Rs 433.98 crore. This is on account of the sale of UltraTech CemCo shares to Grasim Industries (Rs 353.32 crore) and sale of marketing rights of earth moving equipment products to L&T-Case Equipment Pvt Ltd (Rs 8.56 crore) "" an associate company.

Net sales for the quarter stood at Rs 2,964.31 crore, up 44 per cent (Rs 2,057.34 crore). Despite the sale of cement business, the Q2 result is comparable with the Q2 of last year as the company has recast the financials of the quarter ended September 30, 2003, to exclude the cement business's contribution.

L&T sold its over 16 million tonne cement business to the AV Birla group company "" Grasim Industries. The company announced a dividend of Rs 10 per share that will result into a payout of Rs 146 crore.

While the operating margins for the quarter under consideration was around 5 per cent, YM Deosthalee, chief financial officer of L&T, said that it is expected to increase to 8 per cent by the end of the financial year.

The L&T stock gained 1.24 per cent to close at Rs 830.45 on Bombay Stock Exchange today. AM Naik, chairman of L&T said in a media conference, "With the government's stand on reforms initiatives and in particular about investments in the core sector and infrastructure sector, we are confident the engineering and construction order booking would pick up in the second half and the revenue from this segment is expected to increase by around 30 per cent."

Increasing steel prices and freight cost resulted into an increase in construction material cost to Rs 448.69 crore from Rs 258.53 crore.

Consumption of raw material increased to Rs 1,069.08 crore from Rs 671.42 crore. Staff cost for the quarter increased from Rs 184.79 crore to Rs 200.82 crore.

During the quarter, the company's engineering and construction business booked new orders amounting to Rs 2,459 crore against Rs 3,213 during the same period previous year.

Cumulatively for six month period, order booking of the company stands at Rs 4,692 crore of which exports account for Rs 1,096 crore. Customer order backlog amounted to Rs 16,432 crore as on September 30.