L&T Q2 net profit jumps 27% to Rs1,820 crore
Mumbai: Infrastructure major Larsen & Toubro Ltd (L&T) on Saturday beat analyst estimates by a huge margin and reported a 26.9% jump in net profit to Rs1,820 crore.
Painting a subdued domestic investment environment, L&T said it won’t be able to meet its order inflow guidance of a growth of 12-14% in the financial year 2017-18.
“In so far as orders are concerned, we have looked at the pipeline once again as we regularly do. And we have also factored in that we are delayed by close to three months in terms of orders that we were expected to win. Considering that at the half year are at about -9%, our assessment is that we might pretty much land similar to the orders we reported in the previous year with the possibility of a marginal improvement,” R. Shankar Raman, L&T’s whole time director and chief financial officer, said at a press conference post the company reported its September quarter earnings.
Raman, however, said that the company will be able to meet the revenue guidance of a 12% growth for the full year.
The consensus estimate of Bloomberg analysts was Rs1,223 crore. The big beat was aided by an exceptional gain of Rs136.7 crore on account of the company’s divestment of a subsidiary.
Revenue, on the other hand, grew by 5.7% to Rs26,446.8 crore, aided by a 49.9% jump in the heavy engineering segment to Rs1,211.1 crore.
Earnings before interest, taxes, depreciation and amortization (Ebitda), during the quarter, jumped by 27.9% to Rs2,960 crore, as Ebitda margin expanded by 190 bps year-on-year to 11.2%.
S.N. Subrahmanyan, L&T’s MD & CEO, said another reason for the company’s gloomy order book guidance was the headwinds it was facing in the Middle East due to the turmoil in Saudi Arabia, the embargo of Qatar and the slowdown in Oman and Kuwait.
In case of India, there are plenty of projects, like the river interlinking scheme, the Namami Gange scheme, the Bharatmala scheme, etc., which are being announced. But the new regulatory environment with new laws like the RERA, IBC etc. has led to tendering and decision making slowing down, Subrahmanyan said.
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