Signage for Larsen & Toubro and Shanghai Tunnel Engineering Co. (L&T-STEC) stands at an excavation site of a launching shaft for Metro Line 3, operated by the Mumbai Metro Rail Corp., in the Marol area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Q4 Results: L&T Profit Meets Estimates Even As Operating Margin Slips

Larsen & Toubro Ltd.’s profit for the March-ended period met estimates.

Net profit for the three-month period rose 8 percent year-on-year to Rs 3,418 crore, the company said in a filing. Analysts tracked by Bloomberg had projected the metric at Rs 3,394 crore.

Revenue of the Mumbai-headquartered company rose 10 percent to Rs 44,934 crore over last year, compared with the Rs 44,026-crore estimate. Revenue for 2018-19, at Rs 1.41 lakh crore, met its guidance and was boosted by orders in the infrastructure and hydrocarbon segments—the largest contributor to order inflow. Nearly a third of the company’s orders came from outside India.

Maintains Guidance

L&T maintained its revenue guidance at 12-15 percent for 2019-20, while it forecast its order inflow at 10 -12 percent for the year.

The company also said the directors had recommended a dividend of Rs 18 per share and will pay the same by Aug. 5, subject to approval by the members at its annual general meeting on Aug. 1.

Key Highlights (YoY)

  • Operating profit rose 3 percent to Rs 5,599 crore, missing the Rs 6,002 crore estimate.
  • Operating margin contracted 80 basis points to 12.5 percent.

Segment-Wise Revenue (YoY)

  • Customer revenue from the infrastructure segment rose 12 percent to Rs 26,854 crore.
  • International orders comprised 16 percent of the total order inflow of the segment.
  • The company's hydrocarbon segment secured orders worth Rs 27,781 crore for the year-ended March 2019, which is 76 percent higher than the year-ago period. Orders for the quarter-ended March were at Rs 39,717 crore.
  • Revenue from the heavy engineering segment jumped 58 percent to Rs 771 crore for the quarter.
  • IT and tech services revenue surged 23 percent to Rs 3,773 crore.

In March, the country’s largest engineering and construction company had announced a new initiative—L&T-Nxt—to focus on new-age technologies like artificial intelligence and cybersecurity.

The infrastructure major in March had announced a hostile takeover of Mindtree Ltd. and now holds 25.93 percent in the latter after a fresh acquistion on Thursday.

Shares of Larsen & Toubro ended flat at Rs 1,345.10 apiece, compared with a 0.2 percent decline in the Nifty Index.