L&T Q2 PAT slips 67% YoY to Rs 1819 cr

The engineering and construction majors consolidated net profit fell 67.04% to Rs 1819.45 crore on 12.05% increase in net sales to Rs 34772.90 crore in Q2 September 2021 over Q2 September 2020.

Oct 27, 2021 06:10 IST capital market

On a consolidated basis, Larsen & Toubro (L&T)s profit before tax and exceptional items rose 41.19% to Rs 3018.92 crore in Q2 September 2021 over Q2 September 2020.

The increase in revenue is attributed to project execution momentum with easing of regional lockdowns on progressive vaccination coverage and industry leading growth in the IT&TS portfolio. International sales during the quarter at Rs 12,318 crore constituted 35% of the total revenue.

The bottomline is driven by higher profits in the IT & Technology Services (IT&TS) portfolio and improved margins from the projects & manufacturing portfolio as the pandemic induced stress in previous periods progressively wanes out.

The consolidated net profit includes Rs 144 crore gain on divestment of stake in hydel power plant in Uttarakhand (a part of the development projects segment) and tax expense of Rs 47 crore arising on transfer of the NxT Digital Business from the parent to Mindtree.

The company bagged orders worth Rs 42,140 crore during the quarter ended 30 September 2021, a growth of 50% over the corresponding period of the previous year. The International orders at Rs 22,116 crore during the quarter comprised 52% of the total order inflow.

The consolidated order book of the group was at Rs 330,541 crore as on 30 September 2021, at near record levels, with international orders having a share of 23%.

The infrastructure segment secured orders of Rs 12,108 crore, during the quarter ended September 30, 2021, registering a decline of 17% over the corresponding quarter of the previous year. The segment order book stood at Rs 242,673 crore as on 30 September 2021, with the share of international orders at 19%.

The power segment recorded order inflow of Rs 143 crore for the quarter ended 30 September 2021, reflecting stagnation of fossil fuel power plant prospects, given the ESG concerns. The order book of the segment was at Rs 11,678 crore as on 30 September 2021, with the share of international orders at 4%.

The heavy engineering segment recorded an order inflow of ₹ 648crore during the quarter ended 30 September 2021, recording a growth of 101% on corresponding quarter of the previous year with spurt of orders in Refinery and Oil & Gas segments. The order book of the segment was at Rs 4,359 crore as on 30 September 2021, with the share of export orders at 31%.

The defence engineering segment recorded order inflow of Rs 441 crore during the quarter ended 30 September 2021, registering decline of 67% over the corresponding quarter of the previous year, on account of deferral of awards. The order book of the segment was at Rs 7,254 crore as on 30 September 2021, with export orders constituting 9% of the total order book.

The hydrocarbon segment secured orders valued at Rs 14,503 crore during the quarter ended 30 September 2021. The segment order book was at Rs 50,380 crore as on 30 September 2021, with the international order book constituting 52%.

The IT&TS segment, comprising L&T Infotech, L&T Technology Services and Mindtree, recorded customer revenues of Rs 7,876 crore during the quarter ended 30 September 2021, recording q-o-q growth of 9% and y-o-y growth of 28%, reflecting a surge in demand for more technology focused offerings triggered by the pandemic induced changes in clients business models. International billing contributed 93% of the total customer revenues.

The financial services segment recorded income from operations at Rs 2,976crore during the quarter ended 30 September 2021, registering a y-o-y decline of 11% on account of targeted decline in the loan book. The loan book decreased to Rs 86,936 crore as compared with September 2020 at Rs 98,823 crore, reflecting a cautious lending approach, focus on collections, portfolio sell down, and a phased run down of the de-focused business portfolio.

In its outlook, L&T said that weakening of the second Covid wave and sustained vaccination efforts, the overall business environment is looking more positive and this should lead to the Indian economy registering good growth in the medium term. The positive outlook could be temporarily impacted on the possible occurrence of a third Covid wave.

L&T said it continues to focus on profitable execution of its large projects order book, leverage the strong growth momentum in its IT&TS portfolio, cost optimization measures through automation and intensive use of digital technologies, release of funds through improved working capital management and a phased divestment of non-core assets. The company is confident of building onthe current business momentum and is committed to creation of sustainable returns to its stakeholders.

L&T is an Indian multinational engaged in EPC projects, hi-tech manufacturing and services.

Ahead of the results, shares of L&T fell 0.65% to Rs 1782.80 on the BSE today.

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