Heavy engineering major Larsen & Toubro is on track to meet its full-year order flow guidance of Rs 80,000-85,000 crore, Whole Time Director and Chief Financial Officer Shankar Raman said at a press conference on Thursday. The company won orders worth Rs 19,500 crore during the December quarter, and cumulative orders of Rs 60,100 crore for the nine months of the current financial year, up 22 percent year-on-year.
"We are a quarter four heavy company," Raman said, adding that traditionally, there was a spike in order flows during the last quarter of the financial year.
L&T had guided for a 15-20 percent growth in FY13 order win, and now needs to bag orders of Rs 20,000 this quarter to meet the lower end of the guidance range.
"It has been a satisfactory performance considering the environment we operate in," Raman said. Domestic orders have been slow in coming because of lack of clearances for projects and competition has been intense for the available few orders.
Raman said L&T's performance has been consistent through the year so far, with the company bagging around Rs 20,000 core of orders every quarter. L&T’s third quarter net profit of Rs 1,122 crore just about met analyst estimates, and quarterly revenue of of Rs 15,429 crore was slightly below expectations.
And while L&T managed to meet investor expectation on order wins, operating margins were under pressure at 9.6 percent, flat year-on-year and down 110 basis points over the preceding quarter.
Analysts attributed the trend to a higher share of orders from the construction/real estate segment and international projects, where margins tend to be lower. For the nine month-period, 18 percent of the orders were international ones.
Raman attributed the pressure on margins to rising input costs, and refuted claims that the company was taking on low margins just top meet the FY13 guidance. The company’s order book stood at Rs 1.62 lakh crore as on December end, up 11 percent over the same period last year.
Raman said power, and energy sectors have not yet picked up investment momentum. Order inflows in the infrastructure sector, however, continued to be strong. He said there was no formal communication on the NHAI road projects that GMR and GVK have walked out of. He said L&T would meet its full year guidance, even if the road orders were cancelled.