Engineering major Larsen & Toubro (L&T) today reported 19 per cent increase in consolidated net profit to Rs 1,034.8 for the third quarter ended December 31, on the back of improved sales, driven by execution of contracts from international markets.
The company had clocked a net profit of Rs 866.5 crore in the year-ago period.
Total income rose by 8 per cent to Rs 25,829.3 crore in the October-December period from Rs 23,847.9 crore during the same quarter in FY15.
"The improvement in sales is mainly helped by execution of various contracts in the international market. The international revenue stood at Rs 9,066 crore, which grew 39 per cent compared to last year," the company's Chief Financial Officer R Shankar Raman told reporters here.
The international revenue constituted 35 per cent of the total revenue.
"There are challenges in execution of domestic orders, however, there is scheduled execution of international projects, which are primarily in the infrastructure and hydrocarbons businesses," he said.
The firm's total expenses were, however, higher at Rs 23,799.2 crore from Rs 21,641.2 crore during the reported quarter.
"Steep decline in oil prices, slowing growth in China, falling commodity prices, downturn in global equity markets and significant depreciation of emerging market currencies vis-a-vis the USD have contributed to a volatile economic environment," he said.
L&T won orders worth Rs 38,528 crore at the group level during the quarter. The International order inflow during the quarter at Rs 11,115 crore constituted 29 per cent of the total order inflow. Major orders during the quarter were secured by the Infrastructure segment.
Consolidated order book stood at Rs 2,56,458 crore as on December, higher by 14 per cent on a YoY basis with international order book constituting 27 per cent.
"While industrial and private sector capex has been muted, and is likely to remain so for some more time, the government is pushing infrastructure build-out through increased budgetary allocations, PSU-led spending and through bi-lateral and multi-lateral funding agencies. We are looking at bagging such projects," L&T's Deputy Managing Director and President S N Subrahmanyan said.
He further said the orders in the heavy engineering segment are reducing mainly because of slowdown in activity on the nuclear and defence front.
"There is no activity even from private sector in defence manufacturing. The government is, however, trying to give a boost to the defence sector. If this happens we will see some orders coming to our books," he added.
On outlook, the company said the economy continues to face
headwinds despite favourable macroeconomic factors. Tight liquidity and weak global cues have kept the markets tentative.
Steep decline in oil prices, slowing growth in China, falling commodity prices, downturn in global equity markets and significant depreciation of emerging market currencies vis-a-vis the dollar have contributed to a volatile economic environment.
"However, improved fiscal position at Central and state levels, moderated inflation, softer interest rates, increased allocations on plan expenditure, accelerated reforms and business enabling policy initiatives are expected to better the investment climate in India," Subrahmanyan added.
