- L&T reports a net profit of ₹2,229 crore for the quarter ended September.
- Operating income during the quarter increased 23% to 42,762 crore from ₹34,772 crore last year.
- The company secured orders worth 51,914 crore at the group level during the quarter.
Larsen & Toubro (L&T) today reported a 22.5% increase in consolidated net profit to 2,229 crore for the second quarter compared to ₹1,819 crore in the same period last year.
Operating income during the quarter increased 23% to 42,762 crore from ₹34,772 crore last year.
Operating margin declined marginally to 11.46% in the second quarter from 11.49% last year. While margins in segments such as energy, high-tech manufacturing and development projects improved year over year, margins in the IT services segment and the key infrastructure segment declined.
In the infrastructure segment, EBIDTA margins in the second quarter were 6.6%, lower than the 8.3% recorded in the same quarter last year.
“The softness of EBIDTA margins can be attributed to the mix of jobs, their advancements and input cost pressures from commodity price movements over the past 12-18 months. As commodity prices are now soft, we should be able to recoup what we lost in the first half of the year,” said R Shankar Raman, CFO of L&T in an earnings conference call.
During the quarter, the company recorded orders worth 51,914 crore at the group level, up 23% year-over-year. Two-thirds of these orders are for housework. International orders were ₹17,341 crore during the quarter, representing 33% of the total order inflow.
The group’s consolidated order book was 3.72 lakh crore as of September 30, 2022, with international orders accounting for 28%.
Given the order bookings seen in the first half of the year, the company said it is confident it will meet its 12-15% revenue and order book guidelines – at the top of the band.
The company also recorded an extraordinary profit of ₹300 crore from the sale of a stake in subsidiaries in July-September; compared to ₹782 crore last year.
|Particularities||Q2 FY23||Q1 FY23||Q2 FY22|
|Revenue from operations||₹42,762 crore||₹35,853 crore||₹34,772 crore|
|Net profit||₹2,229 crore||₹1,702 crores||₹1,819 crores|
L&T also said the sale of its 1,400MW Nabha power plant in Punjab may not happen this fiscal year. Raman said running thermal power plants is not the “taste of the season.”
“Investors in the market are looking for broken power plants and Nabha is a well-run unit, but it is not causing any stress,” he said, answering questions about the divestments.
The engineering and construction giant is seeing inflation and certain global headwinds affecting the country’s growth trajectory.
“High inflation, coupled with the threat of an unfavorable BoP amid the increasingly uncertain global economic environment, are potential headwinds to the country’s growth trajectory. High-value investments in the private sector that were scheduled for a major rebound may be delayed by ongoing geopolitical and global economic turbulence,” the company said in a press release.
L&T believes that the government can step up its structural reform efforts in critical areas such as labor, logistics, health and education.
“On the global front, the economic outlook is clouded by significant downside risks, namely the conflict in Eastern Europe affecting food and energy supply chains, gradual polarization and the possibility of stagflation due to supply-driven inflation in an uncertain demand environment,” said L&T.