Larsen & Toubro posted a 22.44 per cent increase in standalone net profit at Rs 1,240.7 crore in the December quarter and lowered its guidance for order inflows, saying it would be challenging to meet the revenue target due to macroeconomic headwinds.
The engineering major had estimated 15 per cent increase in sales and 20 per cent growth in order inflows at the start of this financial year.
"Due to the challenging macroeconomic conditions, we believe it will be difficult for us to meet the target of 20 per cent order-book growth. We would revise it to 15 per cent now. Similarly, there is a fighting chance of meeting the sales guidance for the fiscal at 15 per cent," L&T Chief Financial Officer Shankar Raman told reporters here.
L&T had reported a profit of Rs 1,013.23 crore in the December quarter of the previous financial year. Net sales rose 11.8 per cent to Rs 14,387.51 crore in Q3 from Rs 12,869.34 crore.
"We will have to work hard in the last quarter to make sure we achieve the sales target. We booked orders to the tune of Rs 57,000 crore and to reach the target we may need another Rs 30,000 crore worth of orders," Raman said.
"The country has got into election mode and some policy initiatives are still to be addressed. Investment climate is not favourable, industrial investments are waiting political outcome and public-private partnership projects have taken a hit. In this background, it is our assessment that we could end the fiscal with 15 per cent growth in order inflow than 20 per cent (set earlier)," he said.
The company said it demerged the hydrocarbon business into a wholly owned unit, L&T Hydrocarbon Engineering Ltd, after getting approval from the Bombay High Court.
Subsequently, it transferred the business to the new company from April 1, 2013, the effective date of demerger, and applied to the Registrar of Companies for approval.
"We have not taken into account the sale and profit figures of the new entity for the standalone results and have restated figures in profit and loss account prior to March 31, 2013," Raman said.
L&T's Q3 expenditure was Rs 12,911.85 crore, amounting to about 90 per cent of net sales. It made an exceptional gain of Rs 104.39 crore on dilution of part of its stake in a subsidiary firm. L&T reported other income of Rs 446.78 crore during the quarter.
