By Hritam Mukherjee and Sethuraman N R
BENGALURU (Reuters) -India’s Larsen & Toubro (L&T) topped second-quarter profit estimates on Tuesday, helped by strong growth in its mainstay infrastructure projects segment.
Consolidated net profit after tax rose 44.6% to 32.23 billion rupees ($387.08 million) in the three months ended Sept. 30, beating analysts’ average estimate of 29.19 billion rupees, according to LSEG data.
The Mumbai-based company said it will invest 8.3 billion rupees to set up its first unit for semiconductor chip design and product ownership.
“We will open a few chip design centres in India, but not get into chip manufacturing at present,” Chief Finance Officer R Shankar Raman said in a post-earnings conference call.
The infrastructure company’s order inflows jumped 72%, benefitting from an upbeat capital expenditure (capex) environment that took its consolidated order book up to 4.51 trillion rupees.
“Investment activity is benefiting from continuing public sector capex with growth being witnessed in steel consumption, cement production as well as in imports and production of capital goods,” the company said in a statement.
Infrastructure projects, its biggest segment, logged orders worth 279.90 billion rupees, with international orders contributing 24%.
Due to the variety and scale of orders under its portfolio, L&T’s results are often seen as a bellwether for capital expenditure in the Indian economy.
Its revenue from operations rose more than 19% to 510.24 billion rupees, with international revenues contributing about 43%.
The L&T CFO said the company did not see any impact on order execution as it remained optimistic about fresh projects, even as the recent Middle East conflict raised concerns about the potential increase in crude prices.
Shares of L&T closed flat ahead of results, while the benchmark Nifty 50 index closed down 0.32%.
($1 = 83.2643 Indian rupees)
(Reporting by Hritam Mukherjee and Sethuraman N R in Bengaluru; Editing by Sohini Goswami)