The heavy engineering and construction behemoth- Larsen & Toubro (L&T) has managed to report spectacular results for the second quarter. The company has been one of the most consistent performer as far as the earnings update go and despite the recessionary impacts still hurting the capital goods industry, L&T has come out on the top with its Q2 results
L&T 2nd Quarter Result Highlights
- A profit of Rs 765 crore for the 2nd Quarter this fiscal (July-September 2010), a jump of 32% in net profit
- Total sales up 18% at Rs 9,342 crore for the 2nd quarter
- Total expenditure at Rs 750 crore for the 2nd quarter
- Order book at Rs 20,464 crore for the quarter
The 2nd quarter results have been great but considering the company’s performance in the first of this fiscal, the net profits have taken a beating. The net profits declined by about 34% to Rs 1431.15 crore as against Rs 2178 crore in the first half of 2009.
However, the capital goods industry is still reeling from the after effects of a global slowdown and companies in the sector are facing intense competition. In the wake of all this, the Q2 results seem extremely positive
What drove the Q2 results for L&T?
- Order Book: L&T to my knowledge boasts of one of the heaviest order book and this quarter has been no different. The Q2 order book was robust and the overall order book for L&T was at a whopping Rs 1,15,393 crore
- Satyam Stake Sale: L&T was a front runner to acquire Satyam Computer Services and had acquired close to 4% stake in the company. It did not end up acquiring Satyam but L&T offloaded Satyam shares this quarter (2% of the total 4). The amount from the sale has been accounted in this quarter’s results
As per the CFO, L&T is well on its way to meet the 20% YOY growth target backed by inflows from a few orders. Moreover, L&T has put in application for L&T Finance IPO in a bid to unlock value in the company.
With a healthy order book and another 2% Satyam stake sale on the cards, the yearly results should turn out reasonably well for L&T