Larsen & Toubro, the engineering and infrastructure major, reported consolidated profit at Rs 5,520.3 crore in Q2FY21, a jump of 118 percent compared to the year-ago period due to the divestment of electrical and automation business to Schneider Electric, France.
Profit before exceptional item stood at Rs 1,410.3 crore for the quarter, falling 44.7 percent compared to Rs 2,551.67 crore in same period last year, but better than CNBC-TV18 poll estimates which was pegged at Rs 1,230 crore.
"The impact of pandemic in terms of lower revenue, higher credit provisions in the financial services business and disruption of the Metro services led to significant fall in profit YoY, but sequentially the profit increased nearly four times reflecting pickup in the business momentum," L&T said.
Company recorded consolidated gross revenues of Rs 31,035 crore for the quarter ended September 2020, declining 12 percent YoY due to the lingering impact of the pandemic during the quarter under review, company said in its BSE filing.
"During the quarter, with the labour at various project sites reaching near pre-COVID levels, the businesses saw a pickup in execution momentum compared to Q1FY21 and achieved a sequential growth of 46 percent," it added.
International revenue during the quarter at Rs 12,148 crore constituted 39 percent of the total revenue.
L&T bagged orders worth Rs 28,039 crore at the Group level during the quarter, registering a sequential improvement of 19 percent over the previous quarter, but a decline of 42 percent from the previous year on account of deferment of award decisions largely caused by the pandemic.
International orders during the quarter constituted 36 percent of the total order inflow. "The consolidated order book of the Group stood at Rs 2,98,856 crore as of September 2020, with international order book constituting 24 percent of the total order book," L&T said.
Cash generation from operations was robust during the quarter which was strongly supplemented by proceeds from the divestment of electrical & automation business, company said.
Hence the company has declared a special dividend of Rs 18 per equity share to mark the successful completion of the divestment.
The revenue from infrastructure segment, which has an order book of Rs 2.2 lakh crore, fell 20.2 percent YoY to Rs 13,095.7 crore and its EBIT declined 32.6 percent and margin contracted 90 bps YoY in the quarter ended September 2020.
Power business registered a 40.1 percent year-on-year growth at Rs 688.7 crore in Q2FY21 and its EBIT grew by 20.3 percent but margin declined 30 bps YoY.
Heavy engineering business reported a 0.3 percent increase in revenue at Rs 708 crore, but its EBIT plunged 86.8 percent and margin at 2.6 percent in Q2FY21 contracted sharply from 20.1 percent YoY.
L&T's hydrocarbon business fell 5.9 percent year-on-year to Rs 4,049.7 crore and its EBIT dropped 40.7 percent compared to year-ago period.
The operating performance was also ahead of analysts' expectations. Earnings before interest, tax, depreciation and amortisation (EBITDA) fell 17.1 percent year-on-year to Rs 3,334.8 crore and margin contracted 63 bps YoY to 10.75 percent in Q2FY21.
EBITDA was estimated at Rs 3,050 crore and margin at 9.7 percent for the quarter, according to the CNBC-TV18 poll estimates.