Infrastructure major Larsen & Toubro Ltd (L&T) has reported a consolidated net profit of ₹3,167 crore in the fourth quarter ended March 2018, an increase of 5 per cent from ₹3,025 crore in the same quarter of the previous year.
The company recorded a 10 per cent growth in consolidated gross revenue in the quarter to ₹40,678 crore against ₹36,620 crore in the corresponding period last year. Net profit for FY18 registered 22 per cent growth at ₹7,370 crore.
The group's consolidated revenue for the year grew by 9 per cent to ₹119,862 crore.
The company expects to achieve 12-15 per cent revenue growth and 10-12 per cent growth in the order inflow during the current fiscal, said L&T CFO R Shankar Raman.
According to him, government reforms such as GST, RERA and the Insolvency & Bankruptcy Code (IBC) are among positive sentiments for the infrastructure space in the country and are likely to improve the overall investment climate in the country.
Public capex
During the year ended March 2018, the company has been focussing mainly on the domestic market from the government sector. L&T bagged fresh orders worth ₹152,908 crore at the group level during FY18 with international orders' share declining to 23 per cent in FY18 from 29 per cent to 23 per cent a year earlier.
The company's total consolidated order book stood at ₹263,107 crore as at March 31, 2018.
“Despite limited opportunities, L&T has achieved 7 per cent growth in new orders,” Raman said. In November last year, the company has revised its target for order inflow, earlier set at 10-12 per cent, saying the order inflow “would remain flat”.
According to Raman, for FY19, L&T will remain dependent on orders from the public sector as private investments remain elusive.
SN Subrahmanyan, CEO and MD, said the company is becoming dependent on government orders with around 70 per cent of new orders believed to be coming from the public sector.
“It will take another two-three years for the private capex to come up,” he said, adding that, “so far, we are only seeing offshoots of private capex, mainly in the metals space”.
L&T has written off “non-moving” orders of up to ₹16,000 crore from its order book. These orders, according to the company's management, were mainly in the real estate space and across other infrastructure segments.
Infra focus
The infrastructure segment emerged as the leader among other businesses in terms of order inflow for L&T.
During the Q4FY18, the segment recorded order inflow of ₹33,455 crore registering a growth of 27 per cent over the corresponding quarter of the previous year. The segment secured fresh orders of ₹87,277 crore during the enitre FY18, up by 11 per cent from the year earlier.