Larsen & Toubro is up 6 per cent in trade so far, spiking to a new all-time high of Rs 1,650 during the day.

The infrastructure and engineering behemoth declared its Jan-March 2014 results after market hours on Friday. The company’s net profit received a shot in the arm from one-off income from stake sale in subsidiary L&T Finance Holdings. Net profit, as a result, surged 69 per cent compared to the March 2013 quarter.

Keeping up

While such growth certainly will not be repeated, L&T has played the sluggish infrastructure space cleverly, pushing its international presence – inflows from overseas orders accounted for a third of the total for the year. It moved away from capital-intensive development projects and focused on urban infrastructure and power transmission.

All this helped it expand its order book 13 per cent for 2013-14, a figure few infrastructure companies can claim. Sales growth holding firm at 10 to 11 per cent over the past three quarters is a sign that execution has gone on smoothly.

On the finance front, while interest costs have moved higher by 16 per cent for the Jan-March 2014 quarter, the total debt-equity ratio is a mere 0.34 times. Operating profits cover sales a comfortable 6 times.

Looking ahead

L&T is therefore placed to gain quickly once the domestic infrastructure space comes out of its gloom. L&T’s order book may see better growth. Segments from which new orders were scarce, such as power, mining, and heavy engineering, make up more than a fourth of revenues.

L&T’s trailing 12-month valuation of 27 times is higher than peers. But then, it is also the best in the infrastructure space, with a diversified order book, strong inflows, and low debt.