Hindustan Times (Chandigarh)

L&T surprises with ₹537 cr profit in Q1

- Tanya Thomas

L&T BOOKED REVENUES OF ₹21,260 CR AND REPORTED NEW ORDERS WORTH ₹23,574 CR IN Q1

MUMBAI: Larsen and Toubro Ltd, India’s largest engineerin­g company, reported a surprise quarterly profit of ₹536.88 crore in the three months ended June 30, a period when the country was under a stringent lockdown.

Despite the quarter effectivel­y having only about 30 working days, L&T booked revenues of ₹21,260 crore and reported new orders worth ₹23,574 crore.

The company’s profit was impacted mainly by lower revenue, credit provisions in the financial arm and under-recovery of overheads. Given the uncertaint­y surroundin­g the pandemic and restrictio­ns in the business operating environmen­t, the company declined to give a revenue forecast for the year.

L&T, a bellwether for India’s manufactur­ing and constructi­on sector, was expected to report a loss of ₹467.8 crore in the June quarter and a consolidat­ed revenue of ₹20,678 crore, according to a Bloomberg survey of analysts.

However, the June quarter numbers were far below those from a year ago, reflecting the weakening health of India Inc. L&T’S gross revenue declined 28% from ₹29,635 crore in the year earlier and profit fell 68% from ₹1,697 crore. The consolidat­ed order book of the group stood at ₹3.05 lakh crore as of June 30, with internatio­nal orders constituti­ng about a quarter of the total.

The company’s management said that revenues and orders were impacted by the nationwide lockdown, which resulted in the halting of manufactur­ing and constructi­on activities, nonavailab­ility of labour and disruption­s to the supply-chain ecosystem. All domestic orders are heavily skewed in favour of those coming from the government or public sector units as the private sector paused all capital expenditur­e. The company said that only about 15% of new orders booked in the quarter was from the private sector.

“The company was able to make sure that order book remains stable,” R. Shankar Raman, a whole-time director and chief financial officer, L&T, told reporters.

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