Despite coronavirus, L&T wins record orders in December quarter

Despite coronavirus, L&T wins record orders in December quarter

MUMBAI: Larsen & Toubro’s revenue and profit continued to reflect the impact of the disruption caused by the Covid-19 pandemic in the third quarter, but the company managed to bag mega orders in the past three months, taking its order book to the highest on record.

Consolidated net profit increased 5% from a year earlier to 2,467 crore in the quarter ended December 31. Revenue declined 2% to 35,596 crore.

“The fact that we couldn’t work productively in the first four and a half months of the (fiscal) year has pushed us back in terms of the revenue profile. The catch-up plan will take a quarter or two for it to actually step ahead of the pre-Covid levels. But as we speak about almost catching up with the pre-Covid levels, the headwinds around the execution challenges in an economy just recovering post pandemic is very much there and I don’t think we should discount it,” chief financial officer R Shankar Raman told reporters on a conference call.

L&T put in its kitty the country’s biggest engineering, procurement and construction order for the Mumbai-Ahmedabad high-speed rail corridor, which boosted new order wins to 73,233 crore in the December quarter, up 76% from a year earlier. Consolidated orders were at an all-time high of 331,061 crore as of end-December. About 20% of these came from international markets.

“Most of the orders are moving. There could be one or two that can be classified as slow moving but that’s negligible as a percentage of the overall orderbook. The entire order book is good, profitable, well-intentioned, well-moving, fairly well-secured and funded,” chief executive SN Subrahmanyan said.

L&T’s infrastructure business, which accounts for 45% of revenue, reported a 7% year-on-year decline in sales at 15,828 crore in the past quarter. Sequentially, the business grew 22%, indicating a pickup in order execution and revenue booking after the lockdown.

The heavy engineering business, which has been under pressure due to the drying up of capital expenditure in the private sector, reported a marginal increase in sales and almost 100% growth in new orders at 998 crore, driven by nuclear power project jobs. The hydrocarbon business bagged some large domestic orders even as the company cautioned that subdued oil prices may affect Middle East economies.

The company’s developmental projects segment, where it owns and operates projects, posted a 34% decline in revenue from a year earlier, hit by lower ridership in the lossmaking Hyderabad metro projects and low generation at it Rajpura power station, which was affected by the disruption of rail transport due to the ongoing protest by farmers.

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