L&T said that business has picked up again and workers at its various project sites are reaching near pre-Covid levels but continues to be cautious about growth going forward.
“During the quarter, with the labour at various project sites reaching near pre-Covid levels, the businesses saw a pick-up in execution momentum compared to Q1 FY21, and achieved a sequential growth,” L&T said. SN Subrahmanyan, CEO and MD, L&T, said that 1.8 lakh labourers have been mobilised in the last couple of months. “We have rebounded reasonably well,” said R Shankar Raman, CFO, L&T.
For the September-ended quarter, L&T reported consolidated profit at ₹5,520.3 crore in Q2 FY21, a jump of 118 per cent compared to the year-ago period due to the divestment of electrical and automation business to Schneider Electric.
When compared on a sequential basis, this was a huge increase when it had posted profit of ₹303 crore in June. “The impact of the pandemic in terms of lower revenue, higher credit provisions in the financial services business and disruption of the Metro services led to significant fall in profit on a yearly basis but sequentially the profit increased nearly four times reflecting pick-up in the business momentum,” said Raman.
It also said that it is looking to monetise its Nabha Power plant.
Revenues for the engineering and infrastructure major came in at ₹31,035 crore, a decline of 12 per cent on a yearly basis, due to the lingering impact of the pandemic. When compared to the June-ended quarter, this was a 46 per cent growth.
Cash generation from operations was robust during the quarter which was strongly supplemented by proceeds from the divestment of electrical & automation business.
L&T declared a special dividend of ₹18 per equity share to mark the successful completion of the divestment.
L&T bagged orders worth ₹28,039 crore during the quarter, an improvement of 19 per cent on a sequential basis but a decline of 42 per cent when compared to the year ago period due to deferment of project awards, due to Covid-19. “With the lifting of lockdown and resumption of business operations, the domestic business is expected to improve over the next few quarters,” said Arafat Saiyed, Assistant Vice-President (Research) at Reliance Securities.
International orders during the quarter constituted 36 per cent of the total order inflow. The consolidated order book of the Group was ₹2,98,856 crore as of September, with international order book constituting 24 per cent of the total order book.
Overall EBITDA fell 17.1 per cent year-on-year to ₹3,334.8 crore and margin contracted 63 basis points to 10.75 per cent in Q2.
The revenue from infrastructure segment, which has an order book of ₹2.2 lakh crore, fell 20.2 per cent to ₹13,095.7 crore on a yearly basis. Major orders received included an international order in the water effluent and treatment vertical, domestic orders for rural water supply schemes and some international orders in power transmission and distribution vertical. International orders at ₹4,024 crore constituted 28 per cent of the total orders in this segment. In the quarter, L&T bagged the construction of the Mumbai-Ahmedabad High-Speed Rail corridor (MAHSR) bullet train project for ₹24,985 crore, which will start reflecting from Q3 onwards.
Power business registered a 40.1 per cent year-on-year growth at ₹688.7 crore. Its defence business received orders worth ₹1,341 crore and had a total order book of ₹9,132 crore. Further, L&T’s hydrocarbon business fell 5.9 per cent year-on-year to ₹4,049.7 crore and its EBIT dropped 40.7 per cent compared to the year-ago period.
L&T is also talking to the Telangana government and SBI to see what is best to make the Hyderabad metro project viable, which could involve refinancing, Subrahmanyan said.