Mumbai: The country’s biggest engineering company Larsen and Toubro Ltd (L&T) reported its smallest quarterly profit gain in almost three years as the recession damped machinery orders.
Net income in the three months ended March rose 3.3% to Rs999 crore from Rs967 crore a year earlier, L&T said on Thursday in a statement. Five analysts in a Bloomberg survey predicted a median profit of Rs950 crore. Sales rose 24% to Rs10,470 crore.
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L&T’s earnings may improve in the coming quarters as Prime Minister Manmohan Singh’s government, voted to power for a second term, accelerates infrastructure spending to revive the economy. On 26 May, finance minister Pranab Mukherjee said enough funds must be made available to build roads, ports, bridges and other public works.
“There’s all-round optimism the government will spend more to improve the infrastructure of the country,” said Sanjay Makhija, head of institutional sales at Fortune Financial Services (India) Ltd in Mumbai. “The domestic order inflow will partly help offset the slowdown in global orders.”
L&T rose as much 4.8% during the day in Mumbai trading. The share closed 2.32% up at Rs1,341.80. The Sensex, gained 1.32% on Thursday. L&T, which has Rs70,320 crore of orders as of now, expects more contracts from the power, railways, defence and nuclear sectors, it said.
“Things got into a pause because of the elections and now we hope infrastructure investments will recommence as the mandate is more clear and the government is unshackled,” the company’s executive vice-president R. Shankar Raman said by phone on Thursday.
L&T reiterated its full-year order growth forecast of as much as 35%. It booked a one-time loss of Rs144 crore, the statement said.