L&T surprises with ₹537 cr profit in Q1
L&T BOOKED REVENUES OF ₹21,260 CR AND REPORTED NEW ORDERS WORTH ₹23,574 CR IN Q1
nMUMBAI: 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.