• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Mumbai, Oct. 15 Larsen & Toubro has reported 32 per cent rise in net profit at Rs 460 crore for the quarter ended September 30, against Rs 348 crore recorded in the same period last year.

Sales were up 40 per cent at Rs 7,786 crore (Rs 5,500 crore).

In a clear indication of pressure on profit margins due to rising input cost, the net profit on a sequential basis has dipped 8.39 per cent, even as sales grew 11 per cent from Rs 6,901 crore.

In the half year ended September 30, net profit rose 33 per cent to Rs 963 crore, while sales rose 46 per cent to Rs 14,769 crore.

The interest cost in the September quarter increased five times to Rs 69 crore (Rs 13.24 crore). Interest cost, which is an integral part of the operating profit, has put a strain on the operating profit margin of the company.

Operating profit margin in the second quarter declined marginally by 0.2 per cent to 8.8 per cent due to subcontracting charges as a percentage of total operational income surging 2.20 per cent year-on-year to 18.1 per cent in the second quarter of last fiscal.

Mr Pulkit Bakiwal, research analyst, Sharekhan, said reclassification of certain expenses in the second quarter last financial year has also affected operating margins.

The company has secured fresh orders worth Rs 12,453 crore, registering a growth of 74 per cent. On a cautious note, the company said “it is closely monitoring the unfolding developments in the global financial markets and the impact of these on its growth plans in the medium term.”

In the face of a severe liquidity crunch in the economy and rising interest cost, adversely impacting the demand for its products and services, the segment posted a revenue growth of 13 per cent at Rs 760 crore for the quarter. The segment profitability for the quarter was under strain, due to higher input costs, lower capacity utilisation and competitive pressures constraining the ability to pass through the cost increases to the customers, the company said.

The order inflow at Rs 10,434 crore registered a growth of 90 per cent over the corresponding quarter last year, with the share of international orders at 22 per cent. The segment revenues at Rs 5,990 crore grew by 41 per cent in the second quarter. The order book as on September 30 stood at a record high of Rs 60,931 crore.

The segment reported revenues of Rs 685 crore for the quarter ended September 30, 2008, registering a growth of 16 per cent over the corresponding quarter last year. The share of exports stood at 22 per cent for the quarter.

The company shares on BSE shed 11.01 per cent to Rs 893 on Wednesday.

More Stories on : Engineering | Engineering | Larsen & Toubro Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line