Mumbai, May 28, 2009: Diversified engineering & construction conglomerate, Larsen & Toubro Limited has reported Gross Sales revenues for the year at Rs.34045 crore registering a y-on-y growth of 35%. International Sales at Rs. 6460 crore, flowing largely from the opening Order Book, accounted for 19% of the total revenues.

Despite the slowdown witnessed in the Indian Capital Goods and Infrastructure sectors during the later part of the year, the Company was able to bag fresh orders totaling to Rs. 51621 crore, reflecting a growth of 23% over the previous year.

L&T’s superior execution and delivery capabilities enabled it to report a y-on-y growth of 23% in Gross Sales & Service revenue for the quarter at Rs. 10577 crore.

Driven by improved margins of Engineering and Construction segment, the Company has also reported a healthy growth in profitability. Profit after Tax (PAT) excluding the extraordinary and exceptional items, at Rs. 2709 crore has risen by 29% over the previous year. After considering a net gain of Rs.772.46 crore towards the extraordinary items, PAT for the year ended March 31, 2009 at Rs. 3482 crore grew by 60%.

During the quarter ended March 31, 2008, the Company had recorded an exceptional gain of Rs. 73 crore (net of tax) on divestment of one of its Subsidiary. Excluding the above exceptional gain and extraordinary items for the quarter ended March 31, 2009, PAT at Rs. 1142 crore, increased by 28% over the like amount of the quarter of the previous year.

The Board of Directors has recommended a dividend of Rs. 10.50 per equity share.

Consolidated Group Financials

Aided by a satisfactory performance of its flagship Subsidiaries, the Group has also reported good financials for the year. The Group’s Total Income at Rs. 40480 crore registered an increase of 37% over the previous year. Profit after Tax (PAT) for the year, before extraordinary and exceptional items, increased to Rs. 3007 crore posting a y-on-y growth of 30%. After considering extraordinary and exceptional items, PAT for the year at Rs. 3789 crore grew by 63% as compared to the previous year.

Engineering & Construction (E&C) Segment

New investment in the Infrastructure, Oil & Gas and other Core sectors of the economy was considerably halted in the aftermath of the global financial crisis and accompanying slowdown. The construction industry, however, managed to grow at a relatively higher rate riding on its comfortable order book. The Power sector and the Railways attracted renewed interest and good amount of investment during the year. Capitalizing on these opportunities, the E&C segment reported a healthy growth in its Order Inflows during the year 2008-09 at Rs. 45418 crore posting an increase of 28% over the previous year. The share of international orders booked during the year was 14.5% of the segment’s Order Inflow.

E&C segment revenues for the year ended March 31, 2009 at Rs. 28705 crore registered an increase of 47% when compared to the previous year. The share of export revenues represented 18% of the year’s segment revenues.

The segment Operating Margins at 12.9% marginally improved over 12.7% achieved in the previous year, due to efficient execution of orders, contractual pass-through of cost escalations and higher proportion of margin yielding jobs under execution.

The segment ended the year with a healthy Order Book at Rs. 68753 crore. The international Order Book at Rs. 10063 crore represented 15% of the segment’s Order Book.

Electrical & Electronics Segment

Performance of the Electrical & Electronics segment was impacted adversely by the slowdown in the industrial sector. The segment revenues at Rs. 2778 crore for the year ended March 31, 2009 was higher by 4% when compared with the previous year. Electrical Standard Products, Metering & Protection Systems, Medical Equipment & Systems and Petrol Dispensing Pump & Systems businesses reported lower sales and profitability, due to lower capacity utilization, higher input costs and competition preventing a higher price realisation. The performance of Electrical Systems & Equipment and the Control & Automation businesses was, however,
satisfactory.

Machinery & Industrial Products Segment

The slowdown in the Industrial and real estate sectors in the second half of the year, severely constrained the Segment’s ability to bag fresh orders for construction machinery and industrial products. As the demand plummeted in the last two quarters due to liquidity crisis, the segment achieved gross revenues of Rs. 2475 crore during the year ended March 31, 2009, registering a marginal growth over the previous year. Industrial Valves, Construction Equipment, Industrial Machinery and Welding Systems businesses experienced lower volumes as compared to the previous year. However, the profitability levels were sustained at 20% due to favorable export realization in rupee terms and improved cost management by all the businesses in the segment.

Outlook

The Indian economy is currently going through a phase of cautious optimism, even as the global markets continue to bear the brunt of the financial turmoil and a stymied growth. The macro-economic fundamentals, rejuvenated by the new leadership at the Centre, have inspired confidence in the country’s ability to accelerate its growth momentum. The slowdown recently seen in the Industrial sectors coupled with lower investment in the infrastructure and core sectors, may have some initial impact on the Company’s ability to obtain fresh orders. However,
the country’s basic need to channelise large investments into its energy and infrastructure sectors is expected to receive a fillip as a part of the pro-reform policy of the new Government. The strategic initiatives taken by the Company to augment business prospects in some of the promising sectors such as Power, Railways, Defence and Nuclear will help in exploiting the full potential of the emerging opportunities.

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31 , 2009

Segment-wise Revenue, Result and Capital Employed in terms of Clause 41 of the listing agreement