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Other income at Rs 606 crore, mainly dividends from subsidiaries and treasury gains helped push up L&T profits. The dividends accounted for Rs 270 crore and treasury investment gains for Rs 220 crore.
Further, the company has Rs 5,000-6,000 crore cash and cash equivalents on its books, which were also invested in money market instruments.
This apart, a healthy order book and better execution boosted L&T revenues by 26 per cent y-o-y.
Higher sales
Despite the tough economic and business environment, the order inflow was up 21 per cent at Rs 19,594 crore (Rs 16,190 crore) and the sales number higher at Rs 11,955 crore, said Mr R. Shankar Raman, Chief Financial Officer, L&T.
About 25 per cent of the order inflow was the spillover from the previous quarter. The order book stood at Rs 1,53,095 crore ( Rs 1,36,935 crore) as of June 30, 2012. This represents two years’ revenue for the company. However, operating margins shrank one percentage point to 13.5 per cent.
“It is about the mix of jobs and the selling cycle. While quarter-on-quarter margins will be volatile, we have to be aware of maintaining the trajectory,” he said.
Mr K. Venkataramanan, Managing Director, said: “We believe that in spite of difficult circumstances, there could be some positive direction coming from the government and we are looking at more positive things in the sector we operate in.”
The engineering and construction division, which accounted for 87 per cent of revenues, saw a growth of 30 per cent at Rs 10,441 crore. The orders were mainly from urban transportation and infrastructure.
OUTLOOK
Delayed policy measures, slowdown in industrial production, elevated interest rates and liquidity concerns have moderated growth prospects in the domestic economy. Together with uncertainties in the global markets, these factors have impacted investment sentiment and restricted the business opportunities for the capital goods industry.
The ensuing months could witness renewed focus on economic reforms aimed at improving investment sentiment and attracting capital flows. L&T’s superior execution capabilities and growing order book provide visibility to sustained revenue growth in the medium term, Mr Raman said. On Monday, the L&T scrip closed 1.12 per cent down at Rs 1,374.50 on the BSE.
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