In spite of an overall gloomy scenario, Larsen & Toubro has managed to post growth, though the growth figure would have been even higher, had it not been for the forex losses. Importantly, the company is again witnessing strong order flow and implementation of its projects is on schedule. L&T’s management was sounding much more optimistic than what was seen over the last year.
- L&T posted a sales growth of 26 per cent at Rs 12,078 crore for June 2012 as compared to Rs 9,482.11 crore in June 2011
- Order inflow jumped by 21 per cent at Rs 19,594 crore with bulk of the orders coming in from infrastructure, Buildings & Factories and Power Transmission and Distribution segment
- Current order book stands at Rs 1,53,095 crore
- Net profit grew by 15.75 per cent at Rs 864 crore
- Profit growth however, was on account of higher ‘other income’ which increased from Rs 269.69 crore to Rs 605.84 crore
- Other Income contributes almost 49 per cent at the profit before tax level.
- Operating margin has slipped from 12.11 per cent to 9.1 per cent.
- As a result operating profit fell from Rs 1148.39 crore to Rs 1086.99 crore.
- Lower profits were on account a sharp jump in raw material consumption, which shot up by 69 per cent.
- Forex loss stood at Rs 267 crore, which also contributed to lower margins
- Among the segments, sales from Engineering and Construction grew by 29.5 per cent but earning before interest and tax (EBIT) grew by only 22.5 percent
- Electrical & Electronics saw a flat sales growth but its contribution to EBIT fell by 36 per cent.
- Machinery & Industrial saw sales falling by 17 per cent while its contribution to EBIT fell by 40 per cent.
- However, Integrated Engineering Services posted a growth of 69 per cent, though its contribution to overall sales is small at Rs 295 crore. Operating margin from this segment shot up to 32 per cent from 19.6 per cent in the previous year.
- The company blames delayed policy measures and a slowdown in domestic and global markets for its performance
