Larsen & Toubro Ltd.'s quarterly profit met estimates even as order execution remained muted amid state elections and a slowing economy.
Net profit rose 15 percent over last year to Rs 2,352 crore in the quarter ended December, India's largest construction and engineering company said in an exchange filing. That compares with the Rs 2,400-crore consensus estimate of analysts tracked by Bloomberg.
- Revenue rose 6 percent year-on-year to Rs 36,243 crore, compared with the Rs 39,301-crore forecast.
- Margin expanded 50 basis points to 11.4 percent.
But its operating profit missed estimates. The earnings before interest, tax, depreciation and amoritisation rose 10 percent to Rs 4,119 crore, lower than the consensus forecast of Rs 4,392 crore.
Order execution for most infrastructure firms remained muted due to a slowdown in public spending, particularly by state governments. L&T's margin, however, remained stable due to the services segment driven by Mindtree Ltd.
Still, L&T maintained the order inflow guidance at 10-12 percent for the year and revenue growth guidance at 12-15 percent. To be sure, L&T's revenue in the first nine months of the ongoing fiscal grew only 10 percent year-on-year.
“It is credible that the company has been able to muster its strengths to deal with the economic challenges,” R Shankar Raman, chief financial officer at L&T, said in a post-earnings media interaction. “It is well-known now, well-commented and well-accepted the economic growth has slowed down considerably.”
However, the good part is the opportunities have not disappeared.R Shankar Raman, Chief Financial Officer, Larsen & Toubro
L&T Q3 Results 2019-20: Other Highlights
- Bagged orders worth Rs 41,579 crore during the quarter
- Current order book stands at Rs 3,06,280 crore.
- It won international orders worth 17,901 crore during the quarter.
Shares of L&T closed 0.57 percent lower ahead of the earnings announcement, tracking the decline in the benchmark Nifty 50 Index.
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