L&T Q4 net profit rises 28% on higher revenue

MUMBAI:Larsen and Toubro Ltd (L&T), India’s largest engineering and construction company, on Monday reported a 28% jump in March quarter consolidated net profit on higher revenue and lower taxes, beating Street expectations.

The company missed its own 2016-17 target for order inflows and revenue, as a ₹20,000-crore defence order did not come through. L&T, however, said it expects order inflows to grow 12-14% and revenue by 12% in 2017-18, as the deferred orders materialise.

The private sector capex cycle is unlikely to recover this fiscal, group executive chairman AM Naik said. “With the current push on recovering of debt, about 90% of private sector today is worried about returning money and not borrowing and promoting new projects, at least in the infrastructure sector,” Naik said. Consolidated net profit for the quarter rose to ₹3,025 crore from ₹2,335 crore a year earlier. Total income from operations rose 12% to ₹36,828 crore. Nineteen analysts polled by Bloomberg had expected L&T to report a consolidated net profit of ₹2,650.50 crore; 20 analysts had expected net sales of ₹36,582.20 crore.

In January, L&T said it expects 2016-17 orders and revenue to grow 10% each, revising its earlier forecast of 15% growth in order inflow and 12-15% for revenue.

However, revenue for the year grew only 8% to ₹1.1 lakh crore, while order inflows rose just 5% to ₹1.43 lakh crore.

“Increasingly, for a big company like L&T, it is a challenge to be dependent entirely on government orders to deliver about 15% order inflow growth. They are being conservative with the new forecast of about 12% growth,” said an analyst at a securities house, asking not to be named.

L&T said it won orders worth ₹47,289 crore in the March quarter, up 9.6% from a year earlier. International orders, at ₹9,044 crore, made up 19% of the total order inflow.

The consolidated order book stood at ₹2.61 lakh crore as of March 31, an increase of 5% from a year earlier.

Revenue from the infrastructure business, its largest unit, rose 8.2% to ₹20,300.96 crore in the quarter. Revenue in the power business fell about 2.8% to ₹1,838.55 crore.

In its outlook for the year, the company said it expects an economic recovery to steadily improve, backed by structural reforms.