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Engineering and construction major Larsen and Toubro (L&T) missed analysts estimates on Friday with the first quarter consolidated profit falling 37.3 percent to Rs 606.2 crore compared to Rs 966.9 crore in the year-ago period.
In Q1FY15, the bottomline included an exceptional item of Rs 249.3 crore on stake sale in Dharma port and write-back of provisions. Adjusted for these exceptionals, profit slipped 23.7 percent to Rs 795 crore.
Consolidated revenue grew by 6.7 percent to Rs 20,252.2 crore from Rs 18,975.8 crore during the same period, which was in-line. "International revenue during the quarter at Rs 6,609 crore constituted 32 percent of total revenue," said the company in its filing.
Profit was expected at Rs 830 crore on revenue of Rs 20,066 crore in Q1, according to average of estimates of analysts polled by CNBC-TV18.
L&T said the investment climate remained subdued due to global uncertainties and unhurried pace of reforms in India, adding the business environment will remain challenging in the short term.
It won new orders worth Rs 26,376 crore in June quarter (including international orders worth Rs 8,110 crore), down 21 percent compared to Rs 33,408 crore worth of orders received in June 2014. Major orders were in infrastructure and hydrocarbon segments, wherein order inflow declined 17 percent to Rs 11,791 crore and 39 percent to Rs 3,475 crore during the quarter, respectively.
R Shankar Raman, chief financial officer (while addressing press conference) said the company has missed some orders in Q1 on aggressive price bids.
"We continue to see sluggish pace of awards in infra segment. Investment momentum in industrial capex is yet to pick up. Heavy engineering business performance may remain subdued in short term," he added.
However, the company is confident of meeting its FY16 order growth guidance at this point and FY16 guidance for order inflow and revenue remained unchanged at 15 percent for now, Raman said.
Consolidated order book of the group in Q1 increased by 22 percent to Rs 2.39 lakh crore compared to year-ago period, including 71 percent contribution from infrastructure segment.
Operating profit (earnings before interest, tax, depreciation and amortisation) slipped 9 percent year-on-year to Rs 2,290 crore and margin declined 200 basis points to 11.3 percent during the quarter against forecast of Rs 2,416 crore and 12 percent, respectively.
Revenue from its infrastructure segment increased by 12 percent to Rs 8,475 crore with EBIT (earnings before interest and tax) up 26.3 percent and margin expansion of 40 basis points during the same period.
Revenue from power segment rose 12.4 percent to Rs 1,124 crore with EBIT down 67.8 percent and margin at 9.8 percent. Hydrocarbon business reported 41.7 percent growth at Rs 2,207 crore with EBIT at Rs 39.56 crore (against loss of Rs 942.1 crore). Electrical and automation revenue increased by 7.7 percent to Rs 1,135.2 crore with EBIT up 32.8 percent.
Metallurgical and material handling revenue dropped 41 percent year-on-year to Rs 551.8 crore with EBIT loss of Rs 23.7 crore (against profit of Rs 89.7 crore) in June quarter. Heavy engineering business also declined 24 percent to Rs 654.30 crore with EBIT loss of Rs 4.19 crore (against EBIT of Rs 27.71 crore).
Raman said L&T will sell up to 15 percent stake in L&T Infotech via offer for sale. Favourable currency has helped the IT business and dollar revenue grew by 10 percent, he added.
According to the filing, IT and technology services business increased by 20.8 percent to Rs 2,116.4 crore in June quarter compared to Rs 1,750.9 crore in the corresponding quarter of last fiscal.
The scrip of Larsen and Toubro (which announced earnings after market hours) closed at Rs 1,789.55, up Rs 13.40, or 0.75 percent on the BSE.Posted by Sunil Shankar Matkar
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