Larsen & Toubro Q3 profit slips 17%, but revenue climbs

Engineering and construction major Larsen & Toubro (L&T) reported a 17% decline in its consolidated net profit after tax for the third quarter.

Profit fell to Rs 2,055 crore for the three months ended December 2021 from Rs 2,466.71 crore during the same period last year. 

Consolidated revenue from operations grew 11.4% to Rs 39,562 crore from Rs 35,596 crore.

For the nine months through December, consolidated revenue grew 18% to top the Rs 1 trillion mark. International revenue, at Rs 38,045 crore, made up for 37% of the total. 

L&T reported a consolidated net profit of Rs 5,049 crore for the nine months, lower by 39% on a year-on-year basis. 

L&T said in the third quarter it bagged new orders worth Rs 50,359 crore, down 31% over the same period last year. The decline is on a much higher base owing to a high-speed rail corridor awarded to the company in 2021.

L&T said international orders were at Rs 20,521 crore during the third quarter, making up 41% of the total order inflows, with receipt of large value international orders in the hydrocarbon offshore segment. 

The consolidated order book of the group was at record levels of Rs 3,40,365 crore, with international orders having a share of 24%.

Other key highlights

1) Order inflow for the nine months ended December 2021 was at Rs 119,056 crore, down 5% from a year earlier.

2) International orders at Rs 51,683 crore during the nine-month period constituted 43% of the total.

3) Infrastructure segment secured orders worth Rs 25,330 crore, down 44% on a year-on-year basis.

4) The power segment’s order book was at Rs 10,446 crore, with international orders making up 5% of the share.

5) The hydrocarbon segment saw orders for the third quarter decline 38% on a year-on-year basis, to Rs 8,005 crore.

6) Heavy engineering segment saw orders worth Rs 1,288 crore in the third quarter, up 29% on a year-on-year basis.

7) Revenue for the IT and IT services segment rose 7%; financial services revenue fell 13% during the third quarter.

Management commentary

L&T said that although the Indian economy has been on a rebound, following the pandemic-induced disruptions, growth may be marred by intermittent supply-side constraints and high commodity prices. 

The company said that, in the wake of the Indian government’s intent to push spends on infrastructure, it “maintains a cautiously optimistic view of higher capex spends in the near term”.

L&T said that considering the macroeconomic picture both in India and in the world at large, it continues its planned path of winning targeted orders, focus on profitable execution of its large order book, and leverage the strong growth momentum in its IT portfolio.