Infrastructure and engineering major Larsen & Toubro (L&T) said on Wednesday its consolidated net profit for the second quarter ended September 30, 2018, stood at ₹2,230 crore, up 23 per cent against ₹1,820 crore in Q2 FY18.
The company reported an exceptional gain of ₹295 crore during the period on account of a favourable NCLT resolution.
L&T’s consolidated gross revenue for the quarter stood at ₹32,081 crore, up 21 per cent YoY on the back of double-digit growth across all business segments except the power and defence verticals.
The total order inflow of the group was up 46 per cent with total orders worth ₹41,921 crore secured during the quarter due to a pick-up in domestic ordering activity.
Infrastructure, hydrocarbon and heavy engineering segments as well as the services sector have continued to drive company’s order inflow in the second quarter.
The infrastructure segment secured orders worth ₹23,406 crore, registering a growth of 69 per cent YoY, driven by new orders in the heavy civil infrastructure, buildings and factories and water treatments verticals.
The heavy engineering segment reported 53 per cent YoY growth in revenue led mainly by execution momentum in oil and gas projects.
Public sector push
R Shankar Raman, CFO of L&T, said he continues to believe orders in India will be driven by the public sector going forwards as the private sector remains cautious of fresh investments.
He added that the thrust towards clean fuels has been leading to new orders in the heavy engineering segment serving oil and gas industries as well as the power sector. This is because public sector generators such as NTPC have been setting up flue gas de-sulphurisation (FGD) projects as these are mandated by by the Environment Ministry to curtail the SO2 emissions of power plants.
L&T has maintained its guidance of 10-12 per cent for order inflow and 12-15 per cent for revenue growth. According to Shankar Raman, most of the large projects have got ordered out during the first two quarter of this fiscal, which is in line with L&T’s estimates given the fact that general elections are scheduled for 2019.
Large orders
“There is still a pipeline of large orders; we have to wait and watch. But there are some orders that are quite independent of this timeline — orders for rural electrification, water, irrigation. As we are getting closer to the elections, the ordering momentum actually steps up as there is belief that the near-term memory of people is going to be an important factor in trying to make democratic choices,” he said.