X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
L&T: Gaining momentum - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • May 29, 2001

    L&T: Gaining momentum

    Driven by a sharp 61% jump in fourth quarter profits, L&T has been able to end the year with only an 8% drop in net profits. The fourth quarter marks a turnaround for the company, which until the third quarter was witnessing declining profitability. The improvement in bottomline has been led by its cement division which has benefited from the significant rise in realisations.

    (Rs m) 4QFY00 4QFY01 Change FY00 FY01 Change
    Gross Sales 23,763 24,797 4.4% 74,238 78,254 5.4%
    Other Income 1,091 918 -15.9% 1,753 2,097 19.6%
    Expenditure 21,621 21,631 0.0% 66,040 70,220 6.3%
    Operating Profit (EBDIT) 2,141 3,166 47.8% 8,198 8,034 -2.0%
    Operating Profit Margin (%) 9.0% 12.8%   11.0% 10.3%  
    Interest 588 543 -7.6% 3,324 3,613 8.7%
    Depreciation 899 850 -5.5% 2,932 3,131 6.8%
    Profit before Tax 1,746 2,691 54.2% 3,696 3,387 -8.4%
    Other Adjustments       126 0  
    Tax 191 187 -2.1% 405 236 -41.6%
    Profit after Tax/(Loss) 1,555 2,504 61.1% 3,416 3,151 -7.8%
    Net profit margin (%) 6.5% 10.1%   4.6% 4.0%  
    No. of Shares (eoy) 249.0 249.0   249.0 249.0  
    Diluted Earnings per share#* 25.0 40.2   13.7 12.7  
    *(annualised)            

    The company's EPC division has continued to perform well despite the sluggishness in domestic investment activity. The company presently has a healthy order backlog of Rs 90 bn. Another initiative that has augured well for the EPC division has been the focus on the export markets. L&T has procured some 'prestigious' orders in the Middle East, Europe and Sri Lanka.

    L&T continues to be optimistic that the government would continue its thrust on developing infrastructure and core sectors. This will augur well for both its EPC and cement divisions. The company has not stated anything on the developments pertaining to the demerger of its cement division.

    Our projections for L&T are quite divergent from actual results (we were projecting a 24% decline in profits for the full year). This is mainly due to the fact that late in year 2000, it was still unclear whether the cartel in the cement sector will hold up. We were thus cautious on the profitability of the cement sector.

    L&T's press release is not clear on the extent to which the EPC division contributed to the sharp spurt in profits in the fourth quarter (it is anticipated to be significant). Once the details become available a clearer picture will emerge.

    At its current price of Rs 250, L&T trades at a P/e multiple of 19.8x.

     

     

    Equitymaster requests your view! Post a comment on "L&T: Gaining momentum". Click here!

      
     

    More Views on News

    L&T: Amidst a Challenging Business Environment (Quarterly Results Update - Detailed)

    Aug 1, 2017

    Bank credit to industry remained muted and investment momentum was driven mostly by public sector spending.

    L&T: Private Sector Capex Remains in a Tizzy (Quarterly Results Update - Detailed)

    Jul 24, 2017

    Vast majority of private players remain more concerned with debt payback rather than starting new projects.

    L&T: Demonetisation Blues (Quarterly Results Update - Detailed)

    Feb 8, 2017

    Larsen & Toubro (L&T) has announced third quarter results of financial year 2016-2017 (3QFY17). The company has reported 1.7% YoY growth in sales while profits have grown 38.9% YoY. Here is our analysis of the results.

    UltraTech: Post-Acquisition Cement Capacity Augmented to 93 MTPA (Quarterly Results Update - Detailed)

    Aug 11, 2017

    UltraTech Cement completed the acquisition of cement plants of Jaiprakash Associates Limited (JAL) and Jaypee Cement Corporation Limited (JCCL) during the quarter ended June 2017.

    Ambuja Cement: Fall in Other Income Drag Bottomline Lower (Quarterly Results Update - Detailed)

    Aug 11, 2017

    While topline witnessed growth on the back of higher cement sale volumes, a 50.5% YoY fall in other income weighed on Ambuja's bottomline during the quarter ending June 2017.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    L&T SHARE PRICE


    Aug 17, 2017 (Close)

    TRACK L&T

    L&T 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE L&T WITH

    MARKET STATS