Mumbai, Oct. 21: Larsen & Toubro (L&T) — the countrys largest engineering company with businesses from shipbuilding to software — exceeded market expectations by posting a 4 per cent rise in net profit at Rs 798.39 crore in the quarter ended September 30 against Rs 764.98 crore in the year-ago period.
L&Ts stock, however, plummeted 3.54 per cent to Rs 1,336 on the BSE after the company said it was likely to cut down its order inflow outlook from 15 per cent to 5 per cent for 2011-12.
The net profit for the second quarter would have grown 15 per cent if the company had excluded a one-time gain in its profit last year.
Net sales grew 19 per cent to Rs 11,245.24 crore from Rs 9,422.16 crore a year ago.
The company said it expected to maintain its revenue growth outlook at 25 per cent because of its huge order backlog.
However, L&T admitted that it was operating in very challenging times.
A media release from the company said, The slowdown in investment momentum, witnessed in almost all sectors of the economy, is constraining growth opportunities. Intensifying competition, high inflation, elevated interest rates, volatile financial markets and delayed policy intervention are posing considerable challenge for the decision makers.
It added that irrational pricing offered in the market place for limited jobs was also proving to be a challenge.
During the second quarter, L&T reported new orders worth Rs 16,096 crore that took its order book to Rs 1,42,185 crore.
The engineering and construction segment saw its gross revenues rise 21 per cent to Rs 9,704 crore with the business showing an operating margin of 11.9 per cent.
The electricals and electronics segments gross revenues rose 21 per cent to Rs 782 crore with a margin of 10.7 per cent, while machinery and industrial products saw a general downtrend and posted revenues of Rs 666 crore.