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L&T releases Q1 results

L&T releases Q1 results

Last updated: 23 Jul, 2020 | 10:35 am

L&T releases Q1 results
  • Lockdown hits performance: L&T has been amongst the companies which have been most impacted by the lockdown. With labourers migrating to their hometowns, infrastructure projects came at a halt consequently net profit plunged 79% to Rs 303 crore for the quarter ended June 2020 as compared to Rs 1,427 crore a year ago. Revenue was down by 28% to 21,260 crores. IT Tech was the only segment that saw positive growth in revenues. Infrastructure segment which is the main segment the company operates in saw a fall of 53% in revenues.
  • Order inflow weakens: L&T bagged orders worth ₹23,574 crores at the group level during the June quarter registering a decline of 39% on a YOY basis. International orders amounting to ₹8,872 crores constituted 38% of the total order inflow. The consolidated order book of the company stood at ₹305,083 crores as of June 30, 2020, up a mere 4% from Rs 294,000 a year ago.
  • Management commentary: L&T lost about Rs 12,500 crore of revenue in the quarter due to the lockdown, said the CFO of the company {{tweet}}. The revenue ramp-up will take a few more quarters to reach normal levels, he said. Further, only 30% of its workforce is now back at work.

Q1 results for L&T were expected to be muted, with the infrastructure sector getting hit hard by the nationwide lockdown. If not for the one-time gain of Rs 224.7 crore from the sale of its wealth management business and a deferred tax reversal of Rs 307 crore, the company would have reported a loss in this quarter. It will take a quarter or two for the infrastructure segment to pick up as the economy opens up and the supply of labours comes back to normal levels. As capex of PSU companies will come down to reallocate money to the social sector the demand from them might stay muted unless the government steps up the capex plans.L&T has a diversified business portfolio, a robust Balance sheet and strong order book position which will help them sail through the crisis. However, an eye needs to be kept on the pace of order execution in the near future as labour availability is at a very low level currently.

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