Mumbai, January 21, 2010 : Larsen & Toubro has garnered a sizeable quantum of fresh orders during the quarter ended 31st December, 2009 registering a growth of 22% in order inflow over the corresponding period of the previous year. The bulk of the new orders came from the Power, Fertilizer, Building & Industrial sectors. The Company has been able to successfully partake in the renewed prospects brought about by the core sectors leading the country’s economic recovery.

With this, the Company’s order book as on 31st December, 2009 has attained a significant size of Rs.91104 crore.

Gross sales revenue during the quarter ended 31st December, 2009 at Rs.8139 crore is lower by 6% vis-à-vis the corresponding period of the previous year. The sales revenue remained subdued as a result of slower progress of certain jobs due to various extraneous factors as well as the effect of delayed financial closure of a few infrastructure projects. Deferment in release of some high value customers’ orders, including those in the Hydrocarbon Upstream sector, also
resulted in lower sales during the quarter.

Lower sales notwithstanding, the Company fared well on the quality of execution of several large ongoing projects as also in improving the realization from its product sales. Operating margin registered an y-o-y improvement from 11.2% to 12.5%.

Profit after tax from ordinary activities at Rs.696 crore for the quarter grew 15% over the same period of the previous year.

Engineering & Construction Segment

With a strong presence in core sectors of the economy, the Segment has continued its success in bagging prestigious orders during the quarter. A growth of 23% has been registered in Order Inflow for the quarter y-o-y. The Segment’s technological superiority supported by proven execution skills and adherence to challenging cost and time targets helped it win new orders in a fiercely competitive environment.


Though the Segment has recorded lower Sales during the quarter at Rs. 6996 crore, its Operating Margin for the quarter has improved to 13.4% from 12.2% registered during the same period of the previous year. Appropriate risk mitigation strategies, operational efficiency and a closer project monitoring mechanism have enabled the Segment to improve the Operating Margin.

The Segment Order Book stood at Rs. 89375 crore as at December 31, 2009.

Electrical & Electronics Segment

The Segment has reported improved performance by registering an increase of 11% in Gross Sales during the quarter when compared with the revenue of the corresponding quarter of the previous year. It has also been able to sustain its operating margin in the face of stiff competition in an otherwise subdued market, backed by a favourable product-mix, despite rising input prices.

Machinery & Industrial Products Segment

Gross Sales Revenue of the segment for the quarter at Rs. 591 crore shows an improvement of 11% over the corresponding quarter of the previous year. With the construction, mining and tyre manufacturing industries showing signs of recovery, margins have started looking up, registering a satisfactory improvement over the same period of the previous year.

Outlook

The country has embarked on a confident growth path. The growth is likely to be fuelled by increased capacity creation to meet the huge shortage of power and need for building India’s infrastructure. The hydrocarbon sector, which witnessed subdued ordering, is also expected to gather momentum. These coupled with the emerging developments in nuclear and defence sectors should augur well for the Company in the medium term. Though the inflationary pressures in the economy may lead to tightening of liquidity in the system, Government’s resolve to target a 7-8% growth rate should present many exciting business opportunities. The Company is in
readiness to harness much of these prospects to its advantage.

UNAUDITED STANDALONE FINANCIAL RESULTS FOR THE QUARTER ENDED DECEMBER 31 , 2009

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