Larsen & Toubro has announced a 12.5 per cent year-on-year dip in its net profit at Rs 756 crore for the quarter ended June 2013 on the back of weak revenue growth,lower margins and drop in other income.
The net sales of the company rose by only 5 per cent during the quarter at Rs 12,555 crore up from Rs 11,955 crore in the same quarter last year.
As the results fell below market expectations,the shares of the company fell by 7.7 per cent during the day before recovering to close at Rs 901.95,witnessing a fall of 7.46 per cent.
L&Ts reported PAT (profit after tax) of Rs 756 crore was lower than estimate on account of lower EBITA (earnings before interest,taxes and amortisation) margin of 8.5 per cent dragged by forex mark-to-market and lower revenue recognition. Overall,order inflow remains healthy at Rs 25,159 crore, said Rikesh Parikh,VP equities,Motilal Oswal Securities.
The company painted an optimistic picture about its future on the back of a healthy order book growth and its wide ranging capabilities,but said,Resolution of long-pending issues affecting the core sectors,specific measures to boost domestic manufacturing,increased resource allocation for infrastructure sector and further push on next generation reforms are necessary to provide the much needed impetus for investment and growth in India.
It also maintained that macro concerns,currency volatility and uncertainty in the financial markets is impacting growth and investment sentiment of Indian economy.
During the quarter,while the international revenue for the company rose by 68 per cent to Rs 3,378 crore,its other income dipped by 22 per cent to Rs 472.6 crore.
On the sectoral front while the revenue from hydrocarbons and the infrastructure segment rose,the power and metallurgical segment saw a decline.
The revenue from hydrocarbon segment rose by 24 per cent to Rs 2,776 crore and that from Infra segment grew by 22 per cent to Rs 5,460.8 crore.
On the other hand the power segment saw a decline in revenues by 44 per cent to Rs 1,274.9 crore and the metallurgical and material handling segment saw a revenue decline of 17 per cent during the quarter at Rs 1,087 crore.
The company witnessed strength in order inflows as it got fresh orders worth Rs 25,159 crore during the quarter which augurs well for the company going forward.
The order flows were in the fields of building & factories,transportation infrastructure,hydrocarbon and heavy civil infrastructure.
Infrastructure segment accounted for 70 per cent of the fresh orders worth Rs 17,580 crore during the quarter ended June 30,2013. The company now has an order book of Rs 165,393 crore as on June 30,2013 and has risen by 8 per cent.