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    L&T reiterates FY20 guidance despite muted Q3 revenue growth

    Synopsis

    Analysts had predicted that the company may slash its order intake guidance.

    L&T---BCCL
    L&T bagged new orders worth Rs 41,579 crore at the group level in the December quarter, up only 2 per cent driven largely due to international orders as domestic orders saw deferral in award decision.
    Larsen & Toubro on Wednesday maintained its guidance for 2019-20 despite a muted performance in the fiscal third quarter, when its results were hurt by a slowdown in contract execution and weak order intake.

    The engineering major said the business environment continued to be challenging, but its performance in the first six months of the year and an expected pickup in the fourth quarter, traditionally the strongest, gave it the confidence that it would be able to meet the targets of 10-12 per cent growth in order inflows and 12-15 per cent increase in revenue for the fiscal year. Analysts had predicted that the company may slash its order intake guidance.

    “Economic growth has slowed down considerably; we are talking sub-5 per cent as per current assessment. That’s not good news for companies like us, which depend on investment,” chief financial officer R Shankar Raman said. “But the good part of the situation is the opportunities are not disappearing. The prospect and the potential that the company is looking at continues to stay very encouraging.”

    L&T reported a net profit, including the contribution of discontinued operations, of Rs 2,352 crore, up 15.2 per cent on year. Consolidated revenue grew a moderate 6 per cent to Rs 36,243 crore, weighed by a decline in revenue at its biggest business vertical — infrastructure. Construction work at some of the company’s big infrastructure projects were halted during the quarter. Infrastructure segment revenue declined 5 per cent yearon-year to Rs 17,249 crore in the quarter. The key revenue drivers in the quarter were the hydrocarbon business, information technology and technology services.

    L&T snip 2

    “We had an unprecedented situation this year; due to pollution, work in the National Capital Region had a total stoppage for 45 to 60 days. Due to changes in governments and reviews of orders that we have in Andhra Pradesh, we could not proceed there as we originally planned. And the Mumbai area, two of the major projects that we're doing were stopped due to legal and technical issues,” SN Subrahmanyan, its chief executive officer and managing director, told reporters. He said most of these matters were now sorted and work had resumed.

    L&T bagged new orders worth Rs 41,579 crore at the group level in the December quarter, up only 2 per cent driven largely due to international orders as domestic orders saw deferral in award decision.

    The consolidated order book of the group stood at Rs 3,06,280 crore as on December 31, giving revenue visibility for the next twoand-a-half years.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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