L&T Q2 net up 15%, expect margin pressures ahead

Larson & Toubro (L&T) has posted a 15% growth in its net profit at Rs 798 crore for the July-September quarter against Rs 694 crore which it posted in the year-ago period.

The company in a statement provided gross sales figures for the quarter under preview which were up 20% at Rs 11,375 crore year-on-year. The company has given a revenue guidance of 20-25% for the current quarter. Meanwhile, EBITDA margin stood at 10.44% versus 10.78%.

Further, the company said it expects a margin contraction by 75-125 bps from the earlier 50-75 bps for FY12.

The company said the order inflow of Rs 18,096 crore during the quarter took the company’s order book to Rs 1,42,185 crore. “ Despite the current slowdown in new investment decisions in may industries coupled with global uncertainties, the company managed to garner orders against stiff competition, mainly from building and factories, hydrocarbon sectors," the company stated in an earnings release. However, the company is much below its earlier order guidance, it said.

Going forward, the heavy engineering and construction major is likely to face challenges due to high inflation and input cost taking centre-stage.

Meanwhile, the shares of the company slipped 2% at Rs 1,360 on the Bombay Stock Exchange post the announcement of results.

Following are the segment wise performance of the company.

Engineering & Construction (E&C): The segment achieved gross revenue of Rs 97.04 billion, up 21% Y-o-Y. Operating margins were at 12%( the company did not provide the year-ago figures for operating margins)

Electrical & Electronics (E&E): The segment’s gross revenue stood at Rs 7.82 billion, up 21% Y-o-Y. Operating margins remained at same level at 10.7% Y-o-Y

Machinery & Industrial Products (MIP): recorded gross revenue of Rs 6.66 billion on the back of a general downtrend in the industrial off-take. The company did not provide the year-ago revenues

Operating margin stood at 17.7%.

Source: www.moneycontrol.com

Thanks,
Gaurav Agarwal
Head Dealer
DENIP Consultants Pvt Ltd