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L&T Q1 net profit up 16 %

Larsen & Toubro (L&T), on Monday, reported a 16 per cent rise in net profit for the first quarter of 2012-13 at Rs.864 crore. Sales grew 26 per cent to Rs.11,956 crore while other income shot up by 125 per cent to Rs.606 crore largely due to dividend income of Rs.270 crore.

While operating profit grew 19 per cent to Rs.1,693 crore, operating margin contracted a percentage point at 13.5 per cent.

Extraordinary expense of Rs.26 crore arose from payment of voluntary retirement scheme (VRS) and the company added around 4,500 employees to its execution team.

Engineering & Construction (E&C) segment, L&T’s mainstay, accounting for 87 per cent of revenue, saw a revenue growth of 30 per cent at Rs.10,441 crore. There was a higher level of activity in power, hydrocarbon and minerals and metals.

Addressing a press conference, K. Venkataramanan, MD & CEO, said, “We believe that in spite of difficult circumstances, there could be some positive direction coming in from the government, and we are looking at more positive things in the sectors we are involved in.”

R. Shankar Raman, CFO and member of the board, said, “Some of the key sectors in which we operate in have seen momentum like transportation and urban infrastructure.” On the decline in margins, the CFO said, “it is not about execution efficiency alone but also about the mix of jobs and the selling cycle.”

During the quarter, order inflow was up 21 per cent at Rs.19,594 crore and the order book grew to Rs.1,53,095 crore of which private sector accounted for 56 per cent and government orders 22 per cent. “This could be due to some spill-over from the fourth quarter of 2011-12,” Mr. Raman said, adding, “We expect a ramp-up in order inflow in subsequent quarters.”

On the recently signed joint venture with Mazagaon Docks, Mr. Venkataramanan said, “We have been working on playing a more significant part in defence production, and particularly the Indian Navy. “We welcome the step by the government to encourage public-private partnership in project execution.”