The Covid-19-induced lockdown resulted in Larsen & Toubro reporting a significant dip in profits and revenues.

The company reported consolidated net profit of ₹536 crore for the quarter ended June 2020, a 69 per cent decline on a yearly basis from the ₹1,697 crore recorded in the same period last year.

The profits were impacted mainly due to lower revenue, credit provisions in the financial services business and under-recovery of overheads. Revenues for the infrastructure major came in at ₹21,260 crore, a 28 per cent dip from the ₹29,635 crore posted in the June-ended quarter of 2019.

L&T has not given guidance for FY21. SN Subrahmanyan, CEO and MD, said it is too early to give guidance as Covid-related uncertainties continue to impact business.

Further, the lockdown in April and May resulted in a loss of business of ₹12,500 crore in Q1. “India went into the severest of lockdowns and it impacted our business in South and West, where there are still some challenges in terms of work happening on sites,” said Subrahmanyan. However, he added that the company has managed to get 1,90,000 workers back, from 70,000 in March.

Impact on order book

In the June-ended quarter, L&T bagged orders worth ₹23,574 crore, a decline of 39 per cent, signifying a slowdown in business uptake. Of this, 65 per cent of orders were from infrastructure wins, said Shankar Raman, CFO, L&T. The infrastructure segment bagged orders of ₹11,349 crore during the quarter, lower by 32 per cent compared with the year-ago period.

The consolidated order book of the group stood at ₹3,05,083 crore as on June 30, 2020, with an international order book constituting 24 per cent of the total order book.

International revenues in the quarter was ₹9,497 crore which saw an increased contribution from the IT business segment. International orders during the quarter, at ₹8,872 crore, constituted 38 per cent of the total order inflow, L&T said. In Q1, L&T’s EBITDA came at ₹1,620.5 crore, which was below market expectations. Consolidated EBITDA margins were 7.6 per cent, below analyst expectations.

In the June-ended quarter, the power segment did not receive any major order. The order book of the segment was ₹15,443 crore, with the international order book constituting 7 per cent of the total order book, L&T said. Th hydrocarbon segment bagged orders worth ₹1,220 crore, a decline of 64 per cent when compared with the same period last year. The order book of the segment stood at ₹42,094 crore, with the international order book constituting 49 per cent of the total order book.

The financial services segment recorded revenues of ₹3,284 crore, a 5 per cent decline, which Raman said was symptomatic of the contraction of business in the NBFC space. The developmental projects segment registered revenues of ₹554 crore, a decline of 53 per cent, on account of lower off-take from Nabha power plant by Punjab and shut down of metro services during the lockdown in Hyderabad.

The heavy engineering segment secured orders worth ₹476 crore during the quarter, and had an order book of ₹4,118 crore.