L&T PAT rises 25% on strong order growth

Larsen & Toubro (L&T), the country’s largest engineering and construction company, has posted a 25.39 per cent rise in profit after tax (PAT) to Rs 604.11 crore in the third quarter, thanks to the strong growth in engineering and construction business. The PAT excludes the one-time gain of Rs 916 crore the company made from the sale of its ready-mix concrete business to Lafarge SA. Profit for the quarter, including the one-time gain, tripled to Rs 1,520.44 crore.
Total income has risen by 36.45 per cent to Rs 8,922.77 crore from Rs 6,539.41 crore, following 54 per cent growth in its engineering and construction segment.
R Shankar Raman, executive vice-president (Finance), L&T, said, “The financial slowdown has forced the company to cut its investments in ports and shipbuilding businesses. The company, which planned to build a shipyard in Chennai, will cut investment there by half to Rs 2,000 crore.”
In the nine-month period ended December 31, 2008, the company has witnessed a 30 per cent rise in order flow. The average execution cycle time has reduced to 23 months from 24 months. While the company has an order backlog of Rs 68,800 crore, it is expecting a 15-20 per cent rise in the order book for the current quarter.
L&T is seeking new markets beyond West Asia such as Africa, Far East and China to neutralise the slowdown in new contracts from India and to increase its international revenue. In the third quarter, the company’s international business contributed 18.5 per cent to the total revenue, said L&T President J P Naik.
The expenditure in the third quarter has increased by 37.65 per cent to Rs 7,835.74 crore in the December quarter.
The company has paid Rs 307.27 crore as tax in the same period. In a filing to BSE, the engineering giant said it had procured fresh orders worth Rs 14,620 crore in the quarter under review against Rs 13,019 crore in the year-ago quarter.