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L&T says signs of government push on infra; results beat f'cast

Source : REUTERS
Last Updated: Thu, Jan 24, 2013 14:50 hrs
Labourers work inside a steel factory on the outskirts of Agartala

By Kaustubh Kulkarni and Aditi Shah

MUMBAI (Reuters) - Construction and engineering group Larsen & Toubro beat forecasts for quarterly profit and it was seeing early signs of a government push on infrastructure spending which could boost future orders.

Sluggish industrial capital expenditure has squeezed orders for engineering majors such as L&T and Bharat Heavy Electricals , while big ticket energy and infrastructure projects in the country have been stalled by a host of factors.

In September, the government announced reforms aimed at attracting more foreign investment in infrastructure and cutting back on budget-busting subsidies in Asia's third-largest economy where the rate of growth is near a 10-year low.

"There are early signs of a government push on infrastructure investments," L&T chief financial officer R Shankar Raman said on Thursday.

L&T said net profit rose 13 percent rise to 11.2 billion rupees in the three months to December - its third quarter - on the back of strong order wins. That compared with a Thomson Reuters I/B/E/S forecast for 10.8 billion rupees.

Sales rose 10 percent to 154 billion rupees, against a forecast for 161 billion.

The company, whose order book is regarded as a bellwether for corporate confidence in the economy, said it should meet guidance for 15-20 percent order book growth in the full year to March.

L&T, whose order book stood at 1.62 trillion rupees at the end of December, said it expected to win orders worth 200-250 billion rupees in the January-March period.

It won new orders worth 195 billion rupees in its third quarter, up 14 percent year-on-year.

While there has been a delay in payment from some clients, there was no threat of default, it said.

(Editing by Dan Lalor)




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