Despite strong order book, L&T’s Q4 profit declines 6.5% to ₹3,197 cr

Our Bureau Mumbai | Updated on June 06, 2020

SN Subrahmanyan, CEO and MD, L&T   -  BL

Order inflow for the quarter rises 5% to ₹57,785 crore

L&T reported a consolidated profit of ₹3,197 crore in the March-ended quarter — a 6.5 per cent decline as against ₹3,418 crore posted in the year-ago period. This decline was mainly due to muted revenue growth, coupled with higher finance and employee cost.

Addressing reporters on a call, SN Subrahmanyan, CEO and MD, L&T, said the company is expecting it will take a while for the demand to pick up. “At the moment, the scenario is a little muted,” he said.

The company will look at projects by State and Central governments which are multilaterally funded to compensate for the lack of demand in private sector.

Subrahmanyan also said that L&T has started operations in factories and 60-70 per cent of the labour are back. Work in 90 per cent sites have started.

L&T has around 160,000 contract workers. Consolidated profit for the full year was ₹9,549.03 crore, which is a 7.2 per cent growth compared to ₹8,905 crore in FY19.

Consolidated revenues in the fourth quarter went up 2.2 per cent to ₹44,245.28 crore (₹43,303 crore).

Revenues were impacted in the last fortnight of March quarter, as execution pace was hit by client liquidity position, said L&T.

For the full fiscal, revenues came in at ₹1,45,452 crore — an 8 percent growth compared to previous year when revenues were at ₹135,220 crore.

The consolidated order book of the group stood at ₹3,03,857 crore as of March 2020, which is a growth of 4 per cent over FY2019. International orders constituted 25 per cent of the total order book. Further, its order inflow for March quarter was ₹57,785 crore — a growth of 5 per cent — on the back of significant orders bagged in infrastructure segment.

L&T has not given an annual guidance, but said that while the initial quarters of FY21 are expected to be affected, it expects growth revival in the later part of the financial year assuming things get better from here.

Segment-wise results

Infrastructure segment, which contributed to 58 per cent to total business, clocked a 5.7-per cent YoY decline at ₹25,559.7 crore due to slowdown caused by Covid-19. During the quarter, infrastructure order inflows were ₹41,396 crore, a growth of 33 per cent over the same period last year, taking the total order book value to ₹2,24,467 crore.

Revenue from hydrocarbon business, which contributed 11 per cent to total revenue, grew by 15.1 per cent year-on-year to ₹4,979.2 crore and EBIT jumped 30 per cent to ₹502.3 crore. Margins expanded by 120 basis points to 10.1 per cent on a yearly basis.

Power business revenue fell 39.5 per cent to ₹565.3 crore in Q4FY20, and margin expanded to 35.9 per cent, a 3 per cent YoY growth.

Heavy engineering and defence business reported a 22 per cent YoY decline in revenue at ₹701.6 crore and 16.3 per cent fall at ₹928.1 crore, while electrical & automation revenue dipped 27.8 per cent to ₹1,239.1 crore compared to the year-ago period.

Published on June 05, 2020

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