L&T net up 26% on engg biz growth

Posts Rs 560-Cr Profit In Second Quarter ENGINEERING major Larsen & Toubro (L&T) on Thursday said its net profit for the July-September quarter grew 26% due to growth in its engineering and construction business. The company posted a net profit of Rs 580 crore for the quarter, against Rs 460 crore last year. Revenue in the same period grew by just 2.3% to Rs 7,866.2 crore.      The revenue growth was low due to subdued sales in electrical, electronics, machinery and industrial products. "Sales were under pressure due to a demand slump for industrial products and equipment during the quarter," said YM Deosthalee chief financial officer of L&T.      India's largest engineering company saw sales in electrical and electronics fall by 7%, while machinery and industrial products sales slumped 26%. However, in its lead business of engineering and construction, revenue grew 14%. L&T shares fell by nearly 4%, to close at Rs 1,608.50 on BSE.      "This is a temporary blip due to demand slump that has resulted in a flat revenue," said Jigisha Jaini, a senior research analyst with Mumbai-based brokerage Jaypee Capital. "Going forward, the healthy order flow may help the company maintain its annual revenue growth by the end of the current fiscal."      The company's order book totalled Rs 81,623 crore and expects a sustained growth of 30% year-on-year. Order inflow for the second quarter stood at Rs 18,365 crore, grew 47% over the past year. Revenue growth is in line with the plan for the quarter, considering the skewed order inflows in the early quarters, and delay in project clearances and financial closure of projects, said Mr Deosthalee.      "However, the economy has started recovering providing a much needed boost to investment and spurring demand," he added. L&T is looking for opportunities in the infrastructure, power and hydrocarbon sector in India and abroad.      The company has raised $400 million by selling shares to qualified institutional buyers and $200 million through foreign currency convertible bonds for investing into its several projects. L&T is considering to enter power generation, as the government aims to rope in private participation in the sector to achieve set target. AM Naik