Orders are streaming in for infrastructure conglomerate Larsen & Toubro, thanks to the company’s efforts to reduce dependence on the faltering domestic market.

For the nine months ended December 2013, international orders accounted for 30 per cent of new orders, compared to the 18 per cent in the year-ago period.

Execution of projects too, picked up steam in the December quarter, with revenues growing 12 per cent over the year-ago period.

This growth is exclusive of the hydrocarbons business, which was moved to a wholly-owned subsidiary.

Prior to this move, the hydrocarbons space accounted for about 18 per cent of revenues.

The revenue growth in this quarter compares favourably with the June and September 2013 quarters that posted growth of 5 per cent and 10 per cent (inclusive of hydrocarbons).

Margins up The pick up in revenue growth has translated into better profitability.

Recurring net profits, up 12 per cent for the December quarter is a significant improvement from the 12-14 per cent declines seen in the previous quarters.

Lower sub-contracting charges and prices of some inputs, such as cement and steel also aided profitability.

Operating margin at 11.6 per cent is up from the 9.8 per cent of the December 2012 quarter.

Inflow surge In segments such as heavy engineering and infrastructure, the company has seen over 20 per cent of new orders flowing in from overseas.

For instance, in December, L&T won a Rs 2,935-crore contract for a power transmission project in Qatar.

The infrastructure and heavy engineering segments clocked growth in both revenues and operating margins in the December 2013 quarter. With their healthy order book, growth can continue along the same lines for these segments.

But in the power space, with few fresh orders and a declining order book, revenues shrunk 30 per cent. This situation is unlikely to improve in the near-term too.

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