Larsen & Toubro posted a 12 per cent rise in net profit for the quarter ended June 30 on the back of better execution of projects.
Order inflow for the quarter was four per cent higher at Rs 16,190 crore (Rs 15,624 crore). The total order book was up 26 per cent at Rs 136,172 crore (Rs 107,816 crore).
The major orders during the quarter came from buildings and factories, infrastructure, power generation, transmission and distribution, minerals and metals and hydrocarbon sectors.
Mr Y.M. Deosthalee, Chief Financial Officer, L&T, said the company stood by its growth guidance of 15 per cent order inflow and 25 per cent in sales for the year.
On order inflow, he said it was reassuring given the economic environment. However, many orders came in July such as the $889-million overseas order in the hydrocarbon segment. The growth in sales demonstrated smooth project execution.
On power projects, many orders received were yet to reach the threshold level to reflect in sales and hence impacted the margins to some extent. While the global scenario and the domestic environment with fiscal deficit, inflation and high interest rates were a cause of concern, any further slowdown overseas could see softening of commodity prices this year-end.
On the positive side, he said it should be understood that companies implementing projects do not see today's interest rates and inflation in isolation. They also weigh growth and demand.
OUTLOOK
The company said global economic concerns, spiralling inflation and hardening interest rates were likely to impact the growth prospects in the economy. The Indian economy, however, has withstood such cycles in the past and emerged resilient with its strong fundamentals.
Speedy implementation of various initiatives by the Government for industrial and infrastructure development holds the key to an accelerated growth momentum.
On the global front, the GCC countries hold opportunities in the areas of hydrocarbon, power transmission and distribution, besides infrastructure development.
On Monday, the company scrip on BSE closed almost flat at Rs 1,629.
Shankar Raman is CFO, L&T
The L&T Board has announced that Mr R. Shankar Raman will be appointed Chief Financial Officer of the company on September 6 and will subsequently be elevated to the Board on October 1, 2011.
Mr Shankar Raman is currently Senior Vice-President, Finance & Legal.
Mr. Shankar Raman will succeed Mr Y.M. Deosthalee, who takes over as Chairman and Managing Director of L&T Finance Holdings.