Construction major Larsen & Toubro (L&T) reported a 15 per cent jump in consolidated net profit for the December 31, 2023 quarter. The Mumbai-headquartered company clocked ₹2,947 crore profit against ₹2,552 crore registered in the same quarter last year.

Sequentially, there was a dip in profit by 8.53 per cent compared with ₹3,222 crore reported in Q2.

Total revenue from operations grew by 19 per cent to ₹55,128 crore ( ₹46,390 crore). The revenue moved up 8.04 per cent compared with ₹51,024 crore reported in the September quarter.

The board approved the merger of L&T Energy Hydrocarbon Engineering Limited and L&T Sapura Offshore Private Limited. Further, the board approved an investment of up to ₹2,774 crore into L&T Metro Rail (Hyderabad) Ltd, which is an existing subsidiary of the company. The investment will be done by subscribing to equity shares offered under rights issue at face value.

“During the quarter ended December, we made a foray into fabless semiconductor chip design. Our bold strides in new-age sectors, including Digital Platforms, Data Centres, and Green Energy will pivot us into a technology–led conglomerate. Further, we are committed to promoting sustainability by reducing fossil fuel dependence tapping renewables opportunities, using recyclable materials, increasing wastewater recycling, integrating ESG into business initiatives, and collaborating with vendors to build a green supply chain. We are currently witnessing improved capex spending in both our primary geographies of India and the Middle East. Despite continued global macroeconomic and geopolitical volatility, we remain positive about the investment spending continuing in the medium term,” said SN Subrahmanyan, MD & CEO of L&T.

Order Book

The consolidated order book is at ₹4,69,807 crore as of December 31, 2023, with international orders having a share of 40 per cent. The loan book was at ₹81,780 crore in December 2023 compared to ₹80,893 crore in March 2023.

The growth, led by infrastructure, witnessed an order inflow of ₹43,208 crore, up 32.8 per cent y-o-y (₹32,530 crore). The energy segment also reported an increase in order inflow – up 46.7 per cent at ₹13,281 crore ( ₹9,051 crore). During the quarter, the company also manufactured its prototype electrolyser of 1MW.

Red Sea challenges

“The challenge does not revolve around commodity prices anymore but logistics prices. The Red Sea crisis is a matter of concern for logistics but it is a global development and beyond our control. The established competitive routes are being disturbed and we need to stay alert, there could be additional costs involved. We are working on alternate routes,” said Shankar Raman, CFO of L&T.

The company maintained its order growth momentum from the Middle East, particularly Saudi Arabia. The company also secured an order of up to ₹15,000 crore for establishing the largest renewable generation plant in the United Arab Emirates.

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