The Telegraph
Since 1st March, 1999
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L&T logs 42% growth in net

Mumbai, May 29: Robust performance by its engineering and construction business as well as low interest costs helped Larsen and Toubro (L&T) clock a 42 per cent growth in net profit at Rs 265.83 crore in the fourth quarter ended March 31, 2003 as against Rs 186.76 crore in the corresponding previous quarter.

While net sales during the reporting quarter jumped to Rs 3,152.41 crore from Rs 2,587.96 crore in the previous year, the company’s other income too shot up to Rs 120.79 crore as against Rs 70.25 crore. Interest costs were lower at Rs 24.09 crore (Rs 50.30 crore).

The board has recommended a dividend of Rs 7.50 per share amounting to Rs 186.60 crore as against previous year’s Rs 7 per share.

For the year ended March 31, the engineering and construction behemoth’s profits shot up by 25 per cent to Rs 433.10 crore (Rs 346.80 crore) and gross sales were up by 21 per cent to Rs 9,870 crore. Net sales were placed at Rs 9,360.12 crore (Rs 7,725.66 crore).

Speaking to newspersons here today, A. M. Naik, chief executive officer and managing director of L&T, said that the engineering and construction segment booked orders worth Rs 4,337 crore during the quarter while order booking for the fiscal was up by 29 per cent at Rs 9,502 crore.

The domestic capital goods sector showed some signs of revival during the year, he added. However, barring a few sectors like petrochemicals, oil and gas, infrastructure and roads, it could not provide enough opportunities.

The segment recorded a turnover of Rs 2,274 crore during the quarter. For the full year sales amounted to Rs 6,148 crore, an increase of 34 per cent. Further, the order backlog position, he added, is robust at Rs 13,687 crore as of March 31, 2003, an increase of 24 per cent over the previous year. According to Naik, this order book position should lead to a better performance during the current fiscal.

An encouraging aspect of the company’s performance was reduction in interest costs due to the prevailing lower interest rate regime. L&T is also using hedging mechanism for bringing down the cost of funds.

The CEO, however, did not comment on the ongoing differences between its management and the A. V. Birla group over the demerger of its cement division or the recent report of Icra.

Speaking to The Telegraph, senior officials said that L&T is planning to turn around its subsidiary, Narmada Cement, by focussing on the western regions and exports. The officials added that cement operations of Narmada Cement, which is now a separate legal entity, may be merged with L&T’s cement operations at a later date.

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