Engineering and infrastructure key, Larsen and Toubro’s (L&T) on Friday beat analyst estimates to report a year-on-year boost of 3% in the net profit to Rs 3,293 crore through the January-March quarter, even as fresh orders remained beneath stress. Bloomberg consensus estimates have been at practically Rs 3,043 crore.
The company’s consolidated income was up 9% y-o-y at Rs 48,088 crore, in line with the estimates, whilst the Ebitda (earnings ahead of interest, tax, depreciation and amortisation) surged a very good 25% y-o-y to Rs 6,390 crore, substantially ahead of analyst expectations of Rs 5,516 crore. Consequently, operating margins have been up 170 basis points y-o-y to 13.3%.
The order inflow at Rs 50,651 crore was reduce by 12% y-o-y due to deferment of awards. Significant orders through the quarter have been received in many segments like factories, hydel and tunnel, metros, specific bridges, nuclear energy, rural water, renewable power, hydrocarbon offshore, and minerals and metal.
International orders at Rs 18,439 crore made up 36% of the total order inflow, with receipt of greatest Solar PV plant order and transmission line orders. The consolidated order book of the group stood at Rs 3.27 lakh crore as on March 31, 2021, registering a robust development of 8% more than March 31, 2020. International orders constitute 21% of the total order book.
Speaking on the overall performance, SN Subrahmanyan, CEO and managing director, L&T, stated, “Last year was one of the toughest in our company’s history. We are excited about the future for the fact that we have some extraordinary and technologically challenging jobs in our order backlog. However, year ahead has many unknowns. The Covid infection rate, supply chain matters, commodity prices and so on. The company will continue to build and execute on its commitments, but we of course have to calibrate our growth in future based on operating environment and conditions.”
While L&T refrained from providing a firm guidance, R Shankar Raman, chief economic officer, stated that the corporation is estimating that it could close FY22 with a development that could variety anyplace up to low to mid-teens in terms of order inflows and revenues. The corporation expects margins to stay steady with FY21. However, the corporation added that if the circumstances transform materially for the positive or damaging, it will apprise the marketplace. L&T did not give a guidance last year stating that the scenario as a outcome of Covid-19 was new and the corporation did not know what it was staring at.
“We are not hard-coring the guidance. However, we hope that second wave will pass without further damage in a month or two. Assuming that we return to better conditions from second quarter onwards, we are looking ahead to opportunities for the rest of the year with some careful optimism. We also believe that challenges to execution of our large order book of Rs 3.27 lakh crore, will remain in the modest manageable territory,” he stated.
Raman also stated that the corporation hopes that the government will persist with their plans for reviving the financial development by means of robust investment programmes and accommodative policies, which it continued all by means of last year with orders coming in water, metros, energy transmission, amongst other folks.
As for fresh orders coming in from the states, offered that a quantity of them have imposed lockdowns, Subrahmanyan stated that even even though there could be some postponements and delays, the projects will maintain coming and ordering will go on as the scenario normalises. Subrahmanyan also stated that the corporation had 2.45 lakh labourers on rolls in March, nonetheless, the quantity has come down to 1.75 lakh now as some have returned once again.