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Larsen & Toubro (L&T) reported a 12 per cent jump in consolidated net profit for the quarter ended June 30, 2024. The Mumbai-headquartered company clocked ₹2,785 crore profit against ₹2,493 crore registered in the same quarter last year.
Sequentially, there was a dip in profit by 36.64 per cent compared with ₹4,396 crore reported in the March quarter.
Total revenue from operations grew 15 per cent to ₹55,119 crore (₹47,882 crore). The revenue dipped 17 per cent compared with ₹67,078 crore reported in the March quarter.
L&T will be repurposing its hydrogen business and stated that the company is trying to migrate from carbon-heavy to carbon-light to green energy projects.
Steady growth
“We have achieved steady growth across all financial parameters in Q1 FY25, despite the geopolitical situation across the globe. Amid various transformational shifts happening worldwide, we are well-positioned to grasp these opportunities with our expertise in our traditional P&M business and technology-driven new-age businesses. The Financial Services portfolio has achieved a remarkable transformation into Retail Finance with improved profitability. To enhance our presence in the Semiconductor sector, we have recently entered into a share purchase agreement with SiliConch Systems, a Bengaluru-based chip design company. As a testament to our exceptional credit quality and robust financial health, two coveted global credit rating agencies – S&P and Fitch – have assigned a ‘BBB+’ rating to the company. This is two notches above the sovereign rating. Further, MSCI ESG Research has upgraded our ESG rating to ‘BBB’ for improved performance on environmental, social and governance parameters,” said S.N. Subrahmanyan, Chairman and Managing Director, L&T.
The consolidated order-book is at ₹4,90,881 crore as of June 30, 2024, with international orders accounting for 38 per cent of orders.
The growth, led by infrastructure, witnessed an order inflow of ₹40,053 crore, up 0.004 per cent year on year (₹40,051 crore). The energy segment also reported an increase in order inflow by 21 per cent at ₹8,792 crore (₹7,245 crore). The company stated that the domestic private capex is pressured.
Labour shortage
The company stated that it is facing challenges in terms of labour supply owing to multiple reasons.
“There is a need to do a realignment of what people want and the skills required. There is a disinclination of doing manual work and doing more machine work. We are also exporting skilled workers, markets like West Asia have many Indians working there. It has a tax-free economy, whereas it is not the case in India. Apart from the agriculture sector, all other sectors are taxed and the tax keeps increasing. We have to build a competitive place. Hindrance in labour was also attributed to unusual heatwave conditions across the country that had an impact on operations,” said Shankar Raman, CFO, L&T.
The company will be starting training centres in the domestic and in West Asia to improve skilled workers.
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