L&T: Performance driven by cement - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

L&T: Performance driven by cement

Oct 24, 2001

L&T has posted a sharp jump of 223% in profits during the second quarter ended 30th September 2001. The improvement in performance is driven by an expansion in operating margins and a decline in net interest expenditure. However, growth in sales in 2QFY02 was sluggish in account slower growth in EPC revenues.

(Rs m)2QFY012QFY02Change1HFY011HFY02Change
Gross Sales17,41217,7582.0%34,04636,0685.9%
Other Income6336939.4%9601,15019.8%
Expenditure16,15116,3081.0%31,31732,4643.7%
Operating Profit (EBDIT)1,2611,45015.0%2,7293,60432.1%
Operating Profit Margin (%)7.2%8.2%  8.0%10.0% 
Net Interest 1,024902-11.9%1,8621,844-1.0%
Depreciation74281810.2%1,4931,6359.5%
Profit before Tax128424231.4%3341,275282.2%
Tax319-20220-
Profit after Tax/(Loss)125405223.9%3141,055236.4%
Net profit margin (%)0.7%2.3%  0.9%2.9% 
No. of Shares (eoy) (m)249249  249249 
Earnings per share*2.06.5  2.58.5 
*(annualised)           

The star performer is the cement division, which incidentally the company plans to hive off into a subsidiary. Production and sale of cement during the aforesaid quarter have increased by 7.6% and 5.1% respectively. Average realisation for the first half of the current financial year has increased sharply by 18.3% to Rs 1,357 per tonne. Cartelisation has clearly benefited the company in 1HFY02 and one can expect a slower growth in realisation for the rest of the year in light of a subdued demand scenario. The company expects a growth of 5%-6% in cement demand and consequently the cement prices are likely to be stable. The Durgapur grinding unit project is expected to be commissioned by the end of December 2001 and would increase the cement capacity to 16 million TPA.

On the other hand, sluggish industrial production and slower GDP growth has affected the EPC division of the company. Nevertheless, given the leadership position of the company, it has register a 12% growth in EPC contracts by Rs 30 bn. The segment achieved revenues of Rs19 bn, accounting for 52% of the company’s total sales & service income. The sales figure reflects sluggish growth, mainly due to the job mix of order backlog getting skewed in favour of long-cycle jobs and some large orders bagged late last year still at initial execution stage.

Net profit for 1HFY02 stood at Rs 1,055 m, a growth of 236% as compared with the corresponding period of the previous year. This was primarily led a 200 basis points increase in margins and a fall in interest costs, which has been slowing profit growth until now.

The scrip is currently trading at Rs 164 at a P/E multiple of 19.5x annualised 1HFY02 earnings.

Equitymaster requests your view! Post a comment on "L&T: Performance driven by cement". Click here!

  

More Views on News

L&T Announces Quarterly Results (1QFY22); Net Profit Up 143.9% (Quarterly Result Update)

Jul 31, 2021 | Updated on Jul 31, 2021

For the quarter ended June 2021, L&T has posted a net profit of Rs 16 bn (up 143.9% YoY). Sales on the other hand came in at Rs 293 bn (up 38.0% YoY). Read on for a complete analysis of L&T's quarterly results.

L&T 2020-21 Annual Report Analysis (Annual Result Update)

Jul 26, 2021 | Updated on Jul 26, 2021

Here's an analysis of the annual report of L&T for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of L&T. Also includes updates on the valuation of L&T.

Why L&T Shares Fell 3% Despite Strong Operating Performance (Views On News)

May 17, 2021

Covid second wave is expected to temporarily slow down L&T's growth momentum, especially during the first quarter of FY22.

Nuvoco Vistas Makes a Lackluster Debut. Stock Lists at 17% Discount (Views On News)

Aug 23, 2021

Nuvoco Vistas witnessed a tepid listing on the bourses despite strong outlook for the cement sector.

Shree Cement Shares Tanks on Poor Operating Performance in the June Quarter (Views On News)

Aug 10, 2021

Shree Cement lags peers in volume growth.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

The Biggest Winners and Losers in India's Transition to Electric Vehicles (Profit Hunter)

Nov 26, 2021

How India's EV transition could be a major headwind for the incumbents.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

L&T SHARE PRICE


Dec 7, 2021 02:02 PM

TRACK L&T

L&T - KALINDEE RAIL COMPARISON

COMPARE L&T WITH

MARKET STATS