Larsen & Toubro, the engineering & construction major, registered a standalone earnings growth of 16% for the quarter ended June 2012 to Rs 8635.65 crore. Sales for the quarter was higher by 26% (to Rs 11955.35 crore) on the back of on-time execution of strong orderbook however the operating profit was lower by 5% on the back 300 bps contraction in operating margin to 9.1%. Despite subdued operating performance the strong double digit growth in earning was largely on account of higher other income and lower tax incidence. The company accounted a EO expenses of Rs 38.34 crore towards VRS expenses compared to nil in corresponding previous period excluding this the adjusted net PAT was higher by 19% to Rs 889.55 crore.
Order intake in Q1FY13 up by 21%
Order inflow in Q1FY13 was higher by 21% to Rs 19594 crore with significant part of its being spill over orders of las fiscal. The major orders came from Infrastructure, Building & Factories and Power Transmission & Distribution sectors.
Order Book of the company as end of June 30, 2012 stood higher by 12%yoy to Rs 153095 crore, translating into 2.88 times of its FY12 revenue. The Order Book of the E&C segment stood at a healthy Rs 150656 crore as at June 30, 2012.
The Company, during the quarter ended June 30, 2012, has allotted 3,80,562 equity shares of Rs 2 each, fully paid up, on exercise of stock options by employees, in accordance with the Company's stock option schemes.
Delayed policy measures, slow-down in industrial production, elevated interest rates and liquidity concerns have moderated the growth prospects in the domestic economy. This together with the uncertainties in the global markets, have impacted the investment sentiment, restricting thereby the business opportunities for capital goods industry.
Going forward, the ensuing months could witness renewed focus on economic reforms for improving the investment momentum and attracting capital inflows.
On the international front, select markets in the Middle East, South East Asia and CIS countries hold promising prospects, where the Company is strengthening its presence.
With its enhanced capacities and presence in the diverse sectors, the Company is in a good position to harness the opportunities as they emerge. The superior execution capabilities and growing order book provide visibility to sustained revenue growth in the medium term.
The stock hovers around Rs 1374.50.
Larsen & Toubro: Segment Results