Mumbai, Oct. 18: Larsen & Toubro (L&T) today posted better-than-expected profit numbers for the second quarter ended September 30, buoyed by a sharp jump in its other income.
The engineering and construction conglomerate posted a 14 per cent drop in net profit at Rs 977.51 crore compared with Rs 1,137.31 crore in the corresponding period last year.
Analysts had expected the company to post a net profit of around Rs 900 crore.
A key factor behind the improved bottomline was the rise in other income, which spurted to Rs 449.42 crore from Rs 331.14 crore a year ago.
Analysts said better execution of orders also helped.
“This (the second quarter numbers) was mainly on the back of strong execution performance and higher other income,” Viral Shah, senior research analyst at Angel Broking, said.
The strong execution saw L&T topping analysts’ projections of a 10 per cent rise in gross revenues, which stood at Rs 14,648 crore.
The prevailing economic slowdown has impacted capital goods entities such as L&T as companies scaled back on their expansion and new project plans. L&T said despite the tough conditions, the upward trend in order inflow was sustained for the second consecutive quarter of the year.
The company’s order book grew 27 per cent to Rs 26,533 crore during the quarter, translating into a cumulative order inflow of Rs 51,692 crore for the six-month period.
International order inflow more than doubled, contributing 43 per cent to the total order inflow, on the back of a few orders for large projects in West Asia.
The major orders came from the infrastructure and hydrocarbon divisions.
According to L&T, the infrastructure segment mopped up a revenue of Rs 7,181 crore, a growth of 36 per cent, driven by power transmission and distribution and water and renewable energy, besides buildings and factories.
The hydrocarbon segment reported revenues of Rs 2,231 crore, a decline of 9 per cent, because of a lower opening order book and delayed order inflows.
The power sector also disappointed as revenues declined around 40 per cent to Rs 1,181 crore because of lower order inflows and jobs on hand nearing completion.
L&T added that the slowdown in the power sector impacted order inflows to the segment. As a result, the segment could secure fresh orders of only Rs 328 crore.
However, the heavy engineering sector saw a revenue growth of 79 per cent at Rs 1,051 crore as the company was successful in making good progress on the jobs under execution.
The company said the domestic macro-economic outlook remained “weak and uncertain on account of the twin deficits (fiscal and current account deficits), tight liquidity, persistent inflation and heightened volatility in the financial markets. Investment climate in the economy is yet to show sign of recovery”.
The L&T scrip rose 4.06 per cent to Rs 871.25 on the BSE today.