Chart of the day: L&T’s order book size vs stock performance

Riken Mehta
Moneycontrol.com


Shares of Larsen & Toubro rose over 2% immediately after the company announced a 42% jump in its net profit on one time exceptional gains yesterday.


The heavy engineering and construction major surprised analysts’ community by recording a 30% growth in its order book during the quarter.


How did L&T’s order book grow 30% against an expectation of 15-20%?


Analysts had earlier pointed out that bigger projects are hard to come by as there are no roads or any major infra project coming up as there is a general industrial slowdown. Hence, what L&T did is—it shifted its focus to smaller projects, which may have had thinner margins, but helped it improve its order book.


The company got orders worth over Rs 15,000 crore from infra, hydrocarbons, buildings and factories and remaining Rs 5000 crore worth of orders from electrical and electronics and MIP segments.


The company which had estimated its order book to grow 15-12%,YoY to Rs 80,000-84,00 crore in FY13 has already accomplished 50% of its target till now but yet prefers to remain conservative on the order outlook.
What next?


The company’s CEO and MD. K Venkataramanan while addressing media persons said that the outlook is grim for the sector generally. Hence L&T is consistently fine-tuning business strategies. He also did not rule out that he would be looking at newer geographies globally to tap growth at a time when the domestic environment is lull.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s