Larsen & Turbo sees a slowdown in new orders in first 3 months of 2021

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Engineering and construction giant Larsen & Toubro (L&T) on Friday reported an 11.3 percent rise in consolidated net income at Rs 3,820.16 crore for March quarter 2020-21 on the rear of upper revenue from operations.

The company had posted a net income of Rs 3,430.10 crore within the year-ago period, L&T said during a filing to BSE.
These figures take under consideration tax and share in profit (loss) of joint ventures/associates from continuing operations before exceptional items, it said.

Income of the corporate during the January-March period increased to Rs 49,116.16 crore from Rs 44,905.76 crore within the year-ago period, the filing said.
During a call, R Shankar Raman, the Whole-time Director, and Chief treasurer of L&T said the corporate is happy to report a very strong performance for the March quarter.
“As you’ll notice the corporate is reporting consistent improvement quarter-on-quarter right from the dismal quarter one that we reported last year.

“Even though I realise that our business isn’t quarter-on-quarter business being a project company, it’s vital that we measure the progress that we made within the very challenging environment and it helps tons for our staff morale and motivation,” he said.
Stating that the primary two quarters of 2020-21 were very challenging he said there was a vast improvement in December and March quarters and it feels good to finish the year on a really strong note.
The company said in the March quarter the “consolidated PAT at Rs 3,293 crore registered a Q-o-Q increase of 33 percent and a Y-o-Y increase of three percent over the profits for the similar period last year.”

L&T further said order inflow in January-March was at Rs 50,651 crore, lower by 12 percent over the corresponding period of the previous year with the deferment of awards.
Significant orders during the quarter were received in various segments like factories, hydel and tunnel, metros, special bridges, atomic power, rural water, renewable energy, hydrocarbon offshore, and minerals and metal sector.
“International orders at Rs 18,439 crore during the quarter is at 36 percent of the entire order inflow, with receipt of biggest solar PV order and cable orders,” it said.

The consolidated order book of the group stood at Rs 3,27,354 crore as of March 31, 2021, registering a growth of eight percent over the year-ago period.
International orders constitute 21 percent of the entire order book.
“With the pandemic playing out the way that we are anticipating, things will improve slowly from Q2 onwards…We could anticipate a growth environment where growth could range anywhere up to low to mid-teen in terms of order flows and revenues. We all also expect the margin to stay stable around the current level,” Raman said.

“We aren’t hard coding the numbers on guidance but we are sharing our thinking we are looking forward to growth over FY’21…The big assumption that we are making is that the second wave of COVID will leave us with no further damage during a month or two,” he said.
Larsen & Toubro CEO & MD S N Subrahmanyan said the corporate will still build and execute on its commitments amid the second wave of the pandemic within the country. “We will calibrate our growth within the immediate future supported the operating environment and conditions resulting from this. Performance within the challenging FY21 reaffirms our strong position, stability in our performance, and our ability to deliver in line with our strategic priorities in spite of the very fact that nearly 6 months were lost.
“There has been a positive Union Budget and there are more reasons to be optimistic that better days are coming. While some headwinds remain, we are well-positioned to satisfy the expectations of our customers and increase the worth of our shareholders,” he said.

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