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Engineering and infrastructure giant Larsen & Toubro Ltd (L&T) has beaten market expectation with a 29.5 per cent growth in consolidated net profit for the quarter ended March 31, 2017, at ₹3,025 crore compared with ₹2,335 crore for the corresponding quarter of the previous year.
Analysts polled by Thomson Reuters and Bloomberg had expected a consolidated net profit of ₹2,592 crore and ₹2,650 crore, respectively.
L&T has also announced a dividend of ₹21 per share along with one bonus share for every two held.
The Group’s revenue at consolidated level for the quarter increased by 12 per cent to ₹36,828 crore. The revenue for FY-17 has registered 8 per cent growth reaching ₹1,10, 011 crore, while the net profit for the year grew 43 per cent to ₹6,041 crore compared with ₹4,233 crore in FY-16.
L&T’s Chief Financial Officer R Shankar Raman told the media: “If you look back over the last three-odd years, the capital goods industry and the infrastructure sector, in particular, have been facing very challenging times”. Raman added that schemes like “Make in India”, “Skill India” and other initiatives of the current government were laudable, but in reality were still “work in progress” and the industry as well as the country in whole has to figure out ways to complete these things into a “finished product” to be able to take advantage and encash on the opportunities.
Earlier this year, announcing the results for the third quarter, L&T had lowered its full-year estimates for growth in order inflows and revenue growth to 10 per cent (from 15 per cent in case of order inflows and from 12-15 per cent in case of revenues).
However, the company now eyes 12-14 per cent growth in the order inflow for the current financial year.
Order book
Commenting on this forecast, AM Naik, Executive Chairman, L&T, said many orders have been continuously postponed from quarter to quarter. L&T has even removed ₹18,000 crore worth orders from the backlog as there was zero movement on those orders, emphasising that the orderbook that company reports consist only of executable orders.
According to Naik, L&T had expected large orders in defence vertical, for example, an order for Landing Platform Docks (LPD) worth ₹20,000 crore from Indian Navy, however, the order has been postponed for more than a year. L&T Chairman is, however, bullish on defence sector. At the moment, the defence business contributes 3 per cent to the group’s revenue.
“Over the next five years, if the government spends, which I think it will, our idea is to take hi-tech and super hi-tech which includes aerospace, defence, nuclear (revenues) to 10 per cent,” Naik said.
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