Riding on the crest of its robust Q2 performance and the optimism shown by the management over its future performance, the shares of engineering giant Larsen & Toubro (L&T) hit a 52-week high in the NSE today.
The company’s order book touched Rs 1.58 lakh crore with international business accounting for 12 per cent of the total. L&T said it was well placed to realise its ‘near-term targets and medium-term plans’.
The company, in Q2 of this year, registered a gross revenue of Rs 13,328 crore, which was a 17 per cent increase year-on-year. International sales formed 21 per cent of the total revenue in the quarter. The PAT at Rs 915 crore was 15 per cent higher than the same quarter last year. After considering exceptional income, the overall PAT for the quarter was Rs 1,137 crore, a 42 per cent growth.
The order flow at Rs 20,967 crore was a 30 per cent increase year-on-year. The order book was huge at Rs 1,58,528 crore.
The engineering and construction segment (E&C) accounted for the largest chunk of business, bringing in net revenue of Rs 11,633 crore in the quarter ending September this year, a growth of 19 per cent y-o-y. L&T said though the investment cycle was subdued during the quarter, the E&C segment was able to get fresh orders of Rs 19,136 crore, a 31 per cent increase year-on-year. International business accounted for 24 per cent of the total order flow in this segment. The total order book was Rs 1,56,183 crore as at the end of the September quarter. The operating margin also saw an improvement at 12.2 per cent due to efficient project management and execution.
The electrical and electronics segment contributed Rs 839 crore, which was a marginal 7 per cent growth over the same quarter last year. The international business’ share edged up to 10 per cent from 6 per cent earlier. This segment’s operating margin also improved to 11.1 per cent. The Machinery and Industrial Products segment’s revenue, however, witnessed a fall —- Rs 531 crore compared to Rs 592 crore in the same quarter last year. The international business contributed 17 per cent but the operating margin of the segment was lower at 14.7 per cent because of reduced sales and the impact of inflation that pushed up input costs.
Other segments, including integrated engineering services, registered revenue of Rs 308 crore, a 51 per cent growth over the same quarter of last year.
Commenting on the outlook, L&T said uncertainty over the global economic revival and the slow reform process in the country had led to ‘deceleration of growth across the sectors’. Inflation continued to ‘remain elevated, exerting pressure on operating margins’.
In many sectors there was improved credit demand and the recent steps of the Government show its commitment to speed up the pace of economic development, providing positive signals for the prospects of the company.
L&T said it was sustaining the growth momentum and it was well placed to 'realise its near term targets and medium term plans’.
Buoyed by the company’s show in Q2, L&T shares raced to a 52-week high on the NSE, touching a high of Rs 1,674.90 before closing marginally lower at Rs 1,670.10, an increase of Rs 37.05. The trading volume was 33.37 lakh shares. Since touching a 52-week low of Rs 969.15 on December 21 last year, the stock has recovered much lost ground.