Beating Street expectations, engineering and construction major Larsen & Toubro on Monday reported a 14% year-on-year (y-o-y) growth in net profit during the January-March quarter at Rs 1,920 crore and a 21% y-o-y growth in net revenue at Rs 18,461 crore on the back of steady growth in overseas businesses amid a strong order book.
The company’s order book grew 11% to Rs 1,45,723 crore during the quarter, while the share of overseas business in its total revenue jumped from 11% in 2010-11 to 18% in 2011-12.L&T had reported a net profit of Rs 1,686.21 crore in the year-ago period.
For the fiscal year 2011-12, the company’s net profit grew 13% at Rs 4,456 crore and revenue 21% at Rs 53,171 crore.
The company expects 15-20% growth in both revenue and order inflow, said AM Naik chairman, L&T.
The company, however, cited slower order inflow — 30% lower for the quarter at Rs 21,159 crore — and deferred project bids as main concerns in the coming quarters. “We see the next year as a more promising period when these roadblocks are attended to,” said K Venkataramanan, chief executive officer, L&T.
Many large orders were postponed from the last fiscal year to this fiscal, which will result in better order inflow this year, said Shankar Raman, chief financial officer, L&T. “For the past two years we were maintaining operating margins at 13.5%. However, competition is getting tough and in the current situation 13.5% is not sustainable.”
The engineering major also plans to expand its overseas business. “We did not exploit opportunities in Gulf completely,” said Naik.
“We see tremendous potential in Saudi. We will do well in Qatar and Kuwait too this year. We will start this year in Iraq and Indonesia,” added Naik.