L&T net profit drops 17% to ₹2,055cr; missed estimate

Bombay : Larsen & Toubro Ltd said on Friday that its consolidated net profit in the December quarter (Q3FY22) fell 17% from a year earlier for 2,055 crores, analyst estimates missing.

The decline was largely due to the higher base in the prior year quarter, which included the sale of commercial properties in the real estate sector, and gains on the divestment of discontinued electrical and automation businesses. , the country’s largest infrastructure company said in a statement. declaration. More expensive fuel and raw materials have also hurt the business.

“During the quarter in question, we also had to deal with worrying inflation. We also had to adapt to new supply chain protocols and logistical constraints of the pandemic. And while these were challenges the business was facing, there were also opportunities in the form of growing demand, especially after the festive season,” said R. Shankar Raman, Chief Financial Officer.

L&T, however, reported 11% annual growth in consolidated revenue at 39,563 crores in the December quarter.

“The increase reflects improved project execution momentum and robust growth in the IT&TS (information technology and technology services) portfolio,” the statement said.

The company won new orders worth 50,359 crores in the quarter, down 31% from a year earlier, but still above analysts’ highest estimates of 45,000 crore.

L&T said its backlog at the end of the quarter hit a record high 3.4 trillion. The company, Raman added, is trying to stagger commodity purchases to maintain margins, as it has around 25% exposure to commodities subject to price volatility.

The group sees an order pipeline of approximately 4 trillion at the end of the current quarter and “trying to stay as close” to its low-to-medium growth forecast for FY22 order intake, Raman said.

The infrastructure segment, the company’s largest revenue contributor, saw sales grow 15.9% year-on-year to 18,345 crores. Operating margin widened 90 basis points to 7.2%, indicating higher operating leverage.

The energy segment also recorded strong growth for the quarter reported at 19% at 1,066 crore, while the segment’s operating margin increased by 220 basis points to 4.2%.

The hydrocarbons segment, the third largest contributor to L&T revenue, grew by 11% at 4,880 crore.

“With consumer confidence gradually returning, aggregate demand conditions point to a sustained recovery,” the company said, adding that growth could be hampered by rising commodity prices and intermittent supply side constraints. the offer.

“The global macroeconomic environment is likely to slow with vaccine inequality and the rapid spread of the Omicron variant. The world’s largest economies are expected to see a delay in the recovery process with a deceleration in activity, a decrease fiscal support, rising inflation and persistent supply bottlenecks,” the company said.

Shares of Larsen & Toubro ended down 0.7% at 1,897.90 on the National Stock Exchange.

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