Mumbai: India’s biggest engineering company, Larsen and Toubro Ltd (L&T), said first quarter profit rose a better-than-estimated 33% as the oil-rich West Asian nations invested in factories, roads, ports and refineries.
Net income in the three months ended June climbed to Rs502 crore, or Rs16.89 a share, from Rs377 crore, or Rs11.94, a year earlier, Mumbai-based L&T said in a statement on Monday. Five analysts in a Bloomberg survey had a median estimate of Rs395 crore. Sales rose 53% to Rs6,900 crore.
L&T aims to almost double revenue from building luxury condominiums, steel plants and oil rigs in West Asia as record oil prices spur infrastructure spending. Revenue from the region should account for 25% of total sales in two years, compared with the current 16%, chairman A.M. Naik said.
“We expect to win more orders in the Persian Gulf, especially in the midstream and downstream projects,” he had said on 24 July.
The shares rose 3.8% to Rs2,723.55 at the close of trading in Mumbai. The stock has fallen 35% this year.
L&T is also seeking orders in South-East Asia and has sec-ured its first contract from Petronas Gas Bhd, the natural gas distribution unit of Malaysia’s Petroliam Nasional Bhd, Naik said. Growth in the oil-funded economies will counter any slowdown in India, Naik said.
Orders are forecast to climb 35% this fiscal from Rs53,000 crore last year, he said. L&T has begun three new units to handle contracts in the power, shipbuilding and railway sectors.
The engineering and construction segment which accounts for almost 80% of the firm’s revenue witnessed a 28% rise in orders, it said in a statement on Monday.
It expects to win orders worth Rs6,000 crore in the next two years from the power sector, Naik said.