Don't rush to buy Larsen and Toubro: Dilip Bhat
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Engineering firm Larsen and Toubro Ltd (L&T) stated that it anticipated a 15-20% increase in order inflow and income in the subsisting fiscal year, as the company reported a 13% increase in net profit, which stood at Rs 4,456 crore for 2011-12, in spite of slower order wins.
The company’s order inflows declined by 12% in FY12 as compared to a forecast of 5% increase.
L&T’s yearly sales got up 21% to Rs 53,171 crore, less than the projected 25% growth.
In January-March quarter, the engineering firm’s net profit surged 14% to Rs 1,920 crore from Rs 1,686 crore during the year-ago period.
Revenue rose 21% to Rs 18,461 crore as compared to Rs 15,261 crore in the same quarter in 2010-11.
L&T Chief Executive Officer R Shankar Raman stated, “The company hopes to maintain this year’s Ebitda (earnings before interest, taxes, depreciation, and amortisation) margin (11.8 per cent) for the next year. The margins could vary with a correction of 50 basis points, taking into account forex fluctuations and commodity prices.”
“The era of 13.5 per cent margins is a product of good times. We should realise that times have changed and they are not sustainable,” Mr. Shankar Raman added.
2011’s order inflow was mostly affected by delayed project.
But, Mr. Raman stays hopeful about the biz environment.
“We are happy to tell you that delay is on account of postponement and not cancellation. We are well-positioned for opportunities, should the uptick happen. We have also stepped up focus on international markets,” Mr. Raman added.
The stock looks good for medium or long term investment.
The investors can buy the stock on declines.