Infrastructure giant Larsen & Toubro Ltd. beat estimates on all fronts in the second quarter but said it may fall short of its order inflow guidance for the financial year 2017-18.
Order inflows declined 8 percent to Rs 28,732 crore in the quarter ended September over the year-ago period, according to L&T’s earnings statement. Forty percent of these are from international orders. The slowdown reflects a “subdued” investment environment as public sector continues to lead in capital expenditure and private firms are “still short of confidence”, the statement said.
India’s largest infrastructure conglomerate expects a “nominal” growth in order book versus the 12-14 percent growth forecast earlier with several projects yet to receive government approval, L&T’s Chief Financial Officer R Shankar Raman told reporters at the earnings press conference.
R Shankar Raman, CFO, L&TSince we can’t say when the projects will get cleared by the government, there can be no definitive guidance. We will continue to get closer to our order inflow growth guidance of 12 percent as our backlog clears. We will maintain orders at the past year levels with a marginal growth.
Profit Beats Estimates
The engineering giant’s net profit rose 21 percent in the September-ended quarter to Rs 1,820 crore over a year ago. Analysts tracked by Bloomberg had estimated Rs 1,223 crore. The bottom line was aided by an exceptional gain of Rs 137 crore from the sale of a non-core business and portfolio restructuring.
Revenue grew 6 percent to Rs 26,446.8 crore year-on-year led by growth in heavy engineering and hydrocarbon segments. Global orders contributed to a third of the total revenue. International orders now constitute 40 percent of L&T’s total order book of about Rs 2.57 lakh crore.
Operating income went up 28 percent, while operating margin rose 200 basis points to 11.2 percent.
L&T also kept the revenue guidance unchanged at 12 percent and said its margins will improve by 25 basis points in the ongoing financial year.
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