Despite an increase in total income, engineering and construction major Larsen & Toubro (L&T) reported a 6.9% year-on-year decline in standalone net profit for the March quarter at Rs. 1,788 crore, mainly due to a sharp increase in interest costs which skyrocketed to 132%.
The lower than expected numbers came even as net sales of the city-based company rose nearly 10% to Rs. 20,293.83 crore vis-a-vis Rs. 18,460.90 crore a year ago.
But a massive 132% spike in finance costs at Rs. 281 crore during the quarter up from Rs. 121 crore a year ago, spooked the profitability during the March period.
“The quarterly numbers are a misleading indication of the performance of the company, which operates in a sector which has long gestation period. So, revenue improves as and when projects come to completion and so does profitability. Therefore, the performance needs to be seen for the year instead of the quarter,” chairman A M Naik said.