L&T Q2 net vaults 56% to Rs1,819 cr on high IT & TS margins

Consolidated net profit for the corresponding quarter of the previous financial year stood at Rs1,723 crore.

The growth is mainly driven by higher profits in the IT&TS portfolio and improved margins from the Projects & Manufacturing portfolio as the pandemic induced stress in previous periods progressively wanes out. The company also benefited from a Rs144 crore gain on divestment of stake.

L&T reported consolidated revenues of Rs34,773 crore for the quarter ended 30 September 2021, showing a 12 per cent increase from revenues in the corresponding quarter of the previous financial year. 

L&T attributed the increase in evenues to project execution momentum with easing of regional lockdowns on progressive vaccination coverage and industry leading growth in the IT&TS portfolio. 

International sales during the quarter at Rs12,318 crore constituted 35 per cent of the total revenue.

For the half-year ended 30 September 2021, L&T’s consolidated revenues rose 23 per cent year-on-year to Rs64,108 crore, with international revenues during the half-year at Rs23,505 crore, constituting 37 per cent of the total.

Consolidated net profit (after-tax, including exceptional items and discontinued operations) for the half-year ended 30 September 2021 declined by 49 per cent year-on-year to Rs2,994 crore, mainly because net profit for the corresponding period of the previous year included the one-time gain on divestment of L&T’s Electrical & Automation business.

The company received orders worth Rs42,140 crore during the quarter ended 30 September 2021, posting a robust growth of 50 per cent over the corresponding period of the previous year. Almost all segments, including Oil and Gas, Metros, Rural Water Supply, Minerals and Metals, Public Space and Power Transmission and Distribution received fresh orders.

International orders at Rs22,116 crore during the quarter comprised 52 per cent of the total order inflow.

On a cumulative basis, the order inflow for the half-year ended 30 September 2021 stood at Rs68,697 crore, recording a growth of 33 per cent over the corresponding period of the previous year. International orders at Rs31,161 crore during the half-year constituted 45 per cent of the total. Consolidated order book of the group as of 30 September 2021 stood at near record Rs330,541 crore, with international orders having a share of 23 per cent.

Infrastructure segment secured orders worth Rs12,108 crore during the quarter ended 30 September 2021, which, however, registered a decline of 17 per cent over the corresponding quarter of the previous year. International orders at Rs1,325 crore constituted 11 per cent of the total order inflow for the quarter.

The segment order book stood at Rs242,673 crore as of 30 September 2021, with the share of international orders at 19 per cent. The segment recorded customer revenues of Rs13,923 crore for the quarter ended 30 September 2021, posting y-o-y growth of 7 per cent with better execution momentum as workforce availability and supply chain improves post the lifting of lockdown. International revenues constituted 19 per cent of the total customer revenues of the segment during the quarter.

The power segment recorded order inflow of Rs143 crore for the quarter ended 30 September 2021, reflecting stagnation of fossil fuel power plant prospects, given the ESG concerns. International orders constituted 43 per cent of the total order inflow.

The order book of the segment was at Rs11,678 crore as of 30 September 2021, with the share of international orders at 4 per cent.

The segment recorded customer revenues of Rs1,114 crore for the quarter ended 30 September 2021, recording a growth of 62 per cent over corresponding quarter of the previous year with projects in the order book gaining execution momentum. International revenues constituted 20 per cent of the total customer revenues.

The heavy engineering segment recorded an order inflow of Rs648 crore during the quarter ended 30 September 2021, recording a growth of 101 per cent over the corresponding quarter of the previous year with spurt of orders in Refinery and oil and gas segments. International orders constituted 35 per cent of the total order inflow.

The order book of the segment stood at Rs4,359 crore as of 30 September 2021, with the share of export orders at 31 per cent. The segment recorded customer revenues of Rs624 crore for the quarter ended 30 September 2021, recording a y-o-y growth of 4 per cent on improved project execution. International sales comprised 44 per cent of the total customer revenues for the quarter.

Defence Engineering segment recorded order inflow of Rs441 crore during the quarter ended 30 September 2021, registering decline of 67 per cent over the corresponding quarter of the previous year, on account of deferral of awards. International orders constituted 12 per cent of the total order inflow of the segment during the quarter. The order book of the segment stood at Rs7,254 crore as of 30 September 2021, with export orders constituting 9 per cent of the total order book. The segment recorded customer revenues of Rs845 crore during the quarter ended 30 September  2021, recording a y-o-y growth of 10 per cent on the back of strong execution of projects in the Weapons & Engineering System business. The share of international revenues constituted 16 per cent of the total customer revenues for the quarter.

The hydrocarbon segment secured orders valued at Rs14,503 crore during the quarter ended 30 September 2021, showing a significant growth over the corresponding quarter of the previous year. International order inflow constituted 90 per cent of the total order inflow of the segment during the quarter.

The segment order book stood at Rs50,380 crore as of 30 September 2021, with the international order book constituting 52 per cent of the total. The segment posted customer revenues of Rs4,867 crore during the quarter ended 30 September 2021, recording a y-o-y growth of 20 per cent, with peaking of execution activities in the onshore vertical. International revenues had a share of 33 per cent of the total customer revenues for the quarter.

The IT & Technology Services (IT&TS) comprising L&T Infotech, L&T Technology Services and Mindtree, recorded customer revenues of Rs7,876 crore during the quarter ended 30 September 2021, recording q-o-q growth of 9 per cent and y-o-y growth of 28 per cent, reflecting a surge in demand for more technology focused offerings triggered by the pandemic induced changes in client’s business models. International billing contributed 93 per cent of the total customer revenues.

The Financial Services segment recorded income from operations of Rs2,976 crore during the quarter ended 30 September 2021, registering a y-o-y decline of 11 per cent on account of targeted decline in the loan book.

The loan book decreased to Rs86,936 crore as compared with Rs98,823 crore as of 30 September 2020, reflecting a cautious lending approach, focus on collections, portfolio sell down, and a phased run down of the de-focused business portfolio.

The Developmental Projects segment recorded customer revenues of Rs1,170 crore during the quarter ended 30 September 2021, showing a marginal growth of 3 per cent compared to the corresponding quarter of the previous year.

Others segment comprising Realty, Construction and Mining Machinery, Rubber Processing Machinery, Industrial Valves and Smart World and Communication businesses, reported customer revenues of Rs1,379 crore during the quarter ended 30 September 2021, recording a y-o-y growth of 4 per cent with higher handover of residential flats in the Realty business and improved sales witnessed in the Construction Equipment and Rubber Processing Machinery businesses. Export sales at 8 per cent of the total customer revenues majorly pertains to the export of Industrial Valves.

With the progressive weakening of the second Covid wave and sustained vaccination efforts, L&T said the overall business environment is looking more positive and this should lead to the Indian economy recording good growth in the medium term.