• Order Inflow registers healthy growth of 47%
  
• Order Book reaches Rs.81623 crore
  
• Profit after Tax rises 26%
  
• Operating Margin improves to 10.6%

Mumbai, October 22, 2009: Amidst positive sentiments building up within and outside the country, the Engineering and Construction conglomerate Larsen & Toubro, registered a healthy growth in Order Inflow for the quarter ended September 30, 2009 aggregating to Rs. 18365 crore. Order Inflow grew 47% over the corresponding quarter of the previous year.

Gross Sales Revenue of the Company stood at Rs. 7936 crore for the quarter. The corresponding quarter of the previous year had sales of Rs. 275 crore from Ready Mix Concrete (RMC) business which was divested during the second half of the previous year. Excluding the sales from RMC business, Sales for the quarter grew by 6%. The subdued growth in Sales was mainly due to delay in clearances from the clients in case of a few project orders in Infrastructure sector, and also due to lower off-take of industrial products and machineries during this period.

The Company’s Order Book stood at Rs. 81623 crore, registering an increase of 30% y-on-y.

Judicious de-risking strategies coupled with efficient treasury operations have enabled the Company improve the Operating Margin to 10.6% for the quarter over 9.3% for the corresponding quarter of the previous year.

Profit after Tax (PAT) from normal operations at Rs. 568 crore grew 23.5% y-on-y. Including the net gain from exceptional items, PAT for the quarter increased by 26% as compared to the corresponding quarter of the previous year.

Engineering & Construction Segment

Buoyed by the accelerated infrastructure-building initiative of the Central Government, the E&C Segment reported a healthy growth in Order Inflow at Rs. 17004 crore during the quarter. Large Orders from the Hydrocarbon & Power L&T Press Release sectors enabled the Segment to register a record 63% growth in Order Inflow y-on-y. The Segment’s proven capability to execute mega projects within stiff timeline and challenging cost target, helped it win new orders in the fiercely competitive environment.

The Segment recorded Gross Customer revenue of Rs. 6702 crore during the quarter, which translates into an increase of 11.5% y-on-y. This revenue growth was in line with the plan for the quarter, considering the skewed order Inflows in the earlier quarters and delay in project clearances and financial closure of a few infrastructure sector orders.

Continuing its past track record, the Segment was able to maintain its Operating Margin at 11.3% for the quarter. The Segment’s Operating Margin for the six-month period ended September 30, 2009 stands at an improved 11.6% vis-à-vis 11% registered during the same period of the previous year.

The Segment Order Book stood at Rs. 79857 crore as at September 30, 2009.

Electrical & Electronics Segment

The Segment witnessed some recovery in the otherwise sluggish demand for its products, in line with the infrastructure spending ramp up and revival of core industrial sectors. Gross Customer revenue of the Segment for the quarter at Rs. 693 crore was marginally lower when compared with the revenue of the corresponding quarter of the previous year. However, the segment succeeded in improving its Operating Margin by 4 percentage point to 17.1%, due to lower input
prices and better product-mix.

Machinery & Industrial Products Segment

Gross Customer revenue of the segment for the quarter remained subdued at Rs. 501 crore on the back of depressed demand for industrial products and equipment. Though recovery signs were seen in the construction equipment business, margins were under strain due to intense competition and persistent demand of customers for higher discounts in prices.

Outlook

The economy has started showing signs of recovery providing the much needed boost to the investment climate and spurring the demand for capital goods. The recently available data on Index of Industrial Production bear a testimony to this improving growth trajectory. The Infrastructure sector is seeing Government’s deep commitment to encourage fast-track development and attract private investment. The Power sector is also witnessing increasing investment interest from the private sector. The hardening crude oil price in the recent times augurs well for new opportunities in the hydrocarbon sector as also revival of infrastructure development in the Gulf where the Company has a significant presence.

The Company is well poised to exploit these emerging opportunities to the fullest extent.

UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2009

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