L&T

L&T, for Q1FY15, on the face of it, looks like it has ended the quarter with a YoY bumper rise in profit – consolidated net profit came in at Rs.967 crore, up 111% though net sales rose comparatively slower at 10%, coming in at Rs.18,975 crore. Sifting a bit into the internals shows that it was the exceptional gain of Rs.249 crore which truly helped, made on divestment of its stake in City Union Bank and L&T Finance Holdings. Sequentially, net profit for the quarter was down 66%.

The only solace was that in terms of fresh orders, it bagged new orders worth Rs.33,408 crore during the current Q1, which is a 11% YoY and up 15% QoQ. of this, international order book comprised of 26%. EBITDA margin also came in pretty good at 13.3% v/s 10.9% (YoY). In terms of segmental breakup, infra showed a 18% rise in topline and EBIT rose 12%. It was power which was the drag with topline falling 32% and EBIT falling sharper by 45%. The performance of hydrocarbon was also poor, with topline declining by a huge 61% and on profit levels, it remains streaked in red. It Electrical and Automation segment showed a 9% rise in revenue  but slipped on EBIT front due to sluggish demand and change in product mix during the quarter. Metallurgical and material handling showed a 13% decline in topline and its EBIT margin fell from 15.7% to 12.5%. Heavy engineering segment recorded a 4% fall in revenue due to delayed order inflow and depleted order book but thanks to progress on job works, EBIT margin improved from 9.6% to 12.7%. IT, Developmental Projects segment and financial services segment all did well. Realty and ship building too did well.

Currently things on the domestic front remain sluggish but looking ahead, it expects the Govt to spearhead growth and revive core sectors in medium term. Yet, it expects a year for the orders from the recently announced Budget to percolate to companies. Its hydro carbon could continue to see slow growth. Its has kept intact its guidance of 15-20% growth in revenue for the current fiscal and estimates to maintain at current levels.