(Reuters) -India’s Larsen & Toubro (L&T), on Thursday, reported a profit that fell short of market estimates in a seasonally weak quarter but said its orders hit a record high due to strength in its international business, while the domestic economy slowed.
L&T, considered a bellwether for India’s infrastructure spending due to the scale and breadth of the orders, said its orders jumped 53% to an all-time high of 1.16 trillion rupees ($13.39 billion), with more than half coming from outside India.
In the previous three months, its orders had declined by 10% while in the year-ago quarter, they were up by 25%.
The company’s consolidated net profit rose 14% to 33.59 billion rupees in the third quarter ending Dec. 31, below analysts’ average expectation of 38.31 billion rupees, according to LSEG data.
Its revenue increased 17.3% year-on-year but also fell short of estimates in a seasonally weak October-December quarter when building activity slows down as labourers head home for the multiple festivals in the period.
Analysts and multiple Indian companies have flagged that the Indian government’s spending — a key revenue stream for L&T — has not picked up since the general elections in the middle of last year.
However, strong international prospects helped the firm cushion the hit. The Middle East is a key market for L&T and it also operates in the United States, Europe and Africa.
Chairman and managing director S.N. Subrahmanyan said his expectations are that the Middle East will continue to “monetise its oil and gas assets” and the Indian budget, due to be tabled on Saturday, “emphasize (on) building infrastructure….”
However, multiple Indian brokerages said the budget is unlikely to significantly increase capital expenditure. ($1 = 86.6100 Indian rupees)
(Reporting by Hritam Mukherjee in Bengaluru; Editing by Mrigank Dhaniwala and Savio D’Souza)
