L&T Q1 net jumps 22% to Rs 1,472 cr, bags new orders worth Rs 38,700 cr; 'stable quarter on operational fund' says CFO

Mumbai: Engineering major Larsen & Toubro (L&T) reported a 21.22 percent jump in consolidated net profit for the June quarter at Rs 1,472.58 crore mainly on improved execution. The company had reported a profit after tax of Rs 1,214.78 crore in the corresponding quarter last fiscal. Its net profit from “continuing operations” came at Rs 1,697.62 crore. Its revenues from operations grew 9.74 percent to Rs 29,635.95 crore from Rs 27,004.77 crore in Q1 of FY19. The international revenues constituted 31 percent at Rs 9,268 crore.

“This has been a very stable quarter on the operational front. On the other hand, the Competition Commission of India accorded approval to Schneider Electric for the acquisition of our electrical and automation business. As a result, the electrical business has been classified as ‘discontinued operations’, consolidated at profit level,” L&T’s Chief Financial Officer R Shankar Raman told reporters here.

As a result, the PAT from continuing operations stood at Rs 1,361 crore as on 30 June as against Rs 1,129 crore, registering a growth of 20.5 percent, he said. During the quarter, the company bagged new orders worth Rs 38,700 crore registering a growth of 11 percent with the international orders constituting 23 percent of the total order inflow. “Order wins in infrastructure and power segments were the major contributors to the order inflow during the quarter. Though some orders which were expected to come in the said quarter were deferred, which we hope to get materialised in the coming period, we managed to bag significant orders despite being election quarter,” Raman said. [caption id=“attachment_4472887” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] He further said that orders from public sector undertakings and private sector enabled growth for the quarter. Nearly 50 percent of the orders came in from the private sector, Raman said. The consolidated order book of the group stood at Rs 2.94 lakh crore as on June 30 with international order book constituting 21 percent of the total book. About Mindtree, Raman said that as on 30 June, the company held 28.86 percent stake in Mindtree which was later increased to 60.59 percent. “Subsequent to the acquisition of control, the financials will be consolidated as a subsidiary from the second quarter of the current fiscal,” Raman said. L&T Chief Executive Officer and Managing Director SN Subrahmanyan, while replying to a query on the leadership of Mindtree said, “since the Executive Chairman and CEO have moved on, we have found the leadership and we will announce it shortly.” He, however, refused to divulge further details. Recently Mindtree appointed A M Naik as the company’s new non-executive chairman. Meanwhile, the company accounted for Rs 93.55 crore during the quarter towards impairment of investment in L&T Halol Shamlaji Tollway special purpose vehicle against which insolvency proceedings have been initiated post-30 June under the Insolvency code. Oriental Bank of Commerce had pressed for insolvency proceedings against L&T Halol Shamlaji Tollway, an SPV of L&T Infrastructure Development Projects at NCLT’s Chennai Bench. “There has been an admission by NCLT for the insolvency proceeding of the road project where we are not the majority holders. Banks, which are the large stakeholders in the SPV have moved the NCLT and consequently, in recognition of that development, we have impaired the investments. The outcome will come in the due course but we did not want to wait for it, so we have impaired it,” he added.