Larsen & Toubro reports 18.55% increase in consolidated net profit

Mumbai: Engineering major Larsen & Toubro (L&T) on Wednesday reported 18.55 percent increase in consolidated net profit at Rs 2,453.64 crore for the March quarter, and added that it expects 12-15 percent rise in revenues this fiscal. The company had clocked a net profit of Rs 2,069.64 crore in the corresponding quarter of 2014-15. Its total income rose by 18.32 per cent to Rs 33,157.04 crore in the January-March quarter, from Rs 28,022.62 crore during the corresponding period of 2014-15. L&T is expecting 12-15 percent increase in revenues and a 15 percent growth in its order inflows for 2016-17, Group Executive Chairman A M Naik told reporters here. [caption id=“attachment_2799806” align=“alignleft” width=“380”]  Representative image. Reuters[/caption] “Infrastructure projects are largely dependent on government spendings mainly because the private sector is going through stressed times. People who spend on airports, roads, ports, are facing challenging times. “Earlier, nearly 25-35 percent of orders would come from the private sector but now the entire burden is on the government and we are seeing some activity happening on that front,” he said. Naik said there is an accelerated movement in highways and railways.

“We expect some more projects like the coastal road, sea links or Metro 3 to come up for bidding. If these come up, we see a good opportunity. The leadership is good as well as its intentions, but the implementation is taking time. But we are slowly seeing things trickling in and in few months, we will see increased level of activity. So we see better prospects in this fiscal as compared to 2015-16,” he said.

For the whole year, Larsen & Toubro’s consolidated net profit increased by 6.83 percent to Rs 5,090.53 crore as against Rs 4,764.82 crore in 2014-15. Its gross revenue for the year stood at Rs 1,03,522 crore, registering an increase of 12 percent over the previous year. The international revenue during the year at Rs 33,302 crore constituted 32 percent of the total revenue. The company bagged fresh orders worth Rs 1,36,858 crore at consolidated level during the year and international orders stood at Rs 43,956 crore, which constituted 32 percent of the order inflow. “We have improved our competitiveness in the domestic as well as the international markets. We registered an order inflow of 32 percent from the international markets in 2015-16. “Though Middle East, which was our focus market, is challenging on spending money on infrastructure, we are hopeful of better prospects in 2016-17. We are also looking at Africa and Far East to compensate for our Middle East business,” Naik said. He said the company is looking at countries like Mozambique, Tunisia, Kenya, Uganda, Tanzania, Algeria, Botswana and Zimbabwe for its international business. Naik also said the company is looking at Iran, but is waiting for steps to be taken to ensure that financeability is secured. “We are therefore expecting a 15 percent growth in orders. On revenue front, due various impediments like clearances, receivable issues from the government and private sector, who have to pay us a lot of money because of which are are going slow (on execution), we have given a guidance of 12-15 percent growth in revenues in this fiscal,” he said. He said the total receivables from the private sector is around Rs 5,000 crore while from the public sector it is around Rs 8,000-10,000 crore. The company’s consolidated order book stood at Rs 2,49,949 crore as on March 31, 2016, higher by 7 percent on a y-o-y basis, of which international order book constituted 28 percent. Naik also said the government needs to improve the hybrid annuity model to encourage private sector as it does not seem to be much excited with the current model.