L&T: Performance for half-year ended 30th September 2002

L&T recorded Sales & Service income of Rs.4206 crore for the half year ended on 30th September 2002 as against Rs.3607 for the same period last year, reflecting an impressive growth of 16%. The PBT and PAT at Rs.110.91 crore and Rs.86.80 crore respectively are lower by 13% and 18% respectively, compared with the results for the half-year ended 30th September 2001. Sales for the quarter ended 30th September 2002 at Rs.2094 crore show an increase of 17.9% over last year and Net profit for the quarter at Rs.42.18 crore shows an increase of 4.3% over the previous year.

The highlight of the performance is the substantial growth of export turnover from Rs.319 crore to Rs.807 crore. The results, however, have to be considered in the backdrop of the sharp fall in cement prices during the half-year ended 30th September 2002. The Company had to absorb additional provisioning for contribution to retirement benefit funds during the period, largely on account of the falling interest rates and the reduction in fund corpus due to VRS separations. The Company's initiatives on cost reduction/expenditure control, proactive management of funds employed and interest costs have helped maintain the overall profitability of the period under review.

Engineering & Construction
Opportunities in the domestic refinery sector and the infrastructure sector coupled with successes in bagging overseas orders have helped achieve an Order booking of Rs.3367 crore as against Rs.3011 crore during the comparable period last year. The variety of the orders received establishes the versatility and the capability of the Company in executing jobs with technological/logistics challenges.
The strategy to seek overseas orders, to reduce dependence on domestic opportunities has been yielding result. During the period, a large order valued at Rs.492 crore was received from Songas Limited, Tanzania for building gas processing facilities and offshore pipeline work. The orders from Mauritius for constructing an IT park and from Kuwait to enhance Sulphur Recovery Unit of Kuwait Petroleum reflect the recognition of the Company's capabilities in the South Asian countries and the Middle East.

Details of the major orders booked are given below:

Domestic	Rs. Crore
Diesel Hydrotreater (DHDT) and Hydrogen package for IOCL, Panipat	612
Sulphur block and associated facilities for BPCL-Mahul, Mumbai	163
Access road from Dhamkund to Sawalkot for Jammu & Kashmir State Power Corporation Ltd	137
Pipeline work from Paguthan and Baroda for Gujarat State Petronet Limited	112
Construction of Cross-National Belt conveyor for Lafarge Surma Cement, Bangladesh	109
Construction of Mass Housing Complex for MMRDA Rehabilitation Scheme	73
Refurbishing of 220 MW Steam Generator for Nuclear Power Corporation of India Ltd	60
Flyover at Delhi ( Delhi to Dwarka) for Delhi Development Authority	54
S3 package (Trunk - Sewers package) for Bangalore Water Supply & Sewerage Board	50
Construction of Spaghetti Housing Scheme at Kharghar for City Industrial Development Corporation	49
Construction of Steel Bridges from Jammu Udhampur Katra rail link for National Highways Authority of India	38
Installation of Clamp on structure at various platforms for ONGC	33

Overseas	Rs. Crore
Gas processing facilities & offshore pipeline for Songas Limited, at Songo Songo Island, Tanzania	492
Construction of Ebene Cyber City at Mauritius for Business Parks of Mauritius Limited	74
Capacity enhancement project for Sulphur Recovery Unit at Shuaiba Refinery, for Kuwait National Petroleum Corporation	69
Construction of AL Murroj Commercial Complex at Dubai, UAE for AL Ahamadiah Contracting & Trading	60
Facilities for Sulphur Recovery unit at Mina Abdullah Refinery, Kuwait for Kuwait National Petroleum Corporation	52
Construction of Wadi Abdoun Bridge for Municipality of Greater Amman, Jordan	50

The segment's revenues increased by 34% over last year to record Rs. 2531 crore for the half year under review. The segment continues to be the major business of the Company accounting for 60% of the Company's revenues. The order backlog as at 30.09.2002 stood at a healthy Rs.12582 crore, as against Rs. 10542 crore as at 30.09.2001, representing an increase of 19%.

Cement
Revenues from sale of cement & clinker during the period at Rs.1142 crore accounts for 27% of the Company's Sales. In quantitative terms, production and sales of cement amounted to 5.87 million tonnes and 5.61 million tonnes respectively, as against 5.35 million tonnes and 5.14 million tonnes respectively during the comparable period last year.
While domestic sales quantities reflect a growth of 12%, the prices across the markets have registered sharp decline. The average domestic sales realisation during the period under review was Rs.1234 per MT as against Rs.1463 per MT in the previous year, impacting the profitability adversely.

Electrical & Electronics
Revenues for the half-year under review amounted to Rs. 338 crore with a growth of 5% over last year. The export volumes are as yet small, but with the efforts to achieve a geographical market spread gathering momentum, export turnover for the period increased impressively by 143% from Rs 8 crore to Rs. 20 crore. During the period, the segment launched many new products / variants, with encouraging market response. The increasing product range and several value engineering and six sigma initiatives are expected to help enhance the market share.

Outlook
The domestic investment climate is expected to be sluggish in the medium term. While the Company is able to steadily increase the overseas order book, margins may be under pressure.
The Company expects a good growth in E&C revenues for the full year. Cement demand is expected to grow by about 8-9% in the current year and the prices are expected to show a firmer trend in the second half of the year.
Overall, the Company expects around 15% growth in revenues for the year.