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L&T disappoints as Q1 operating profit dip 5%

Larsen & Toubro reported subdued results during the first quarter despite 21% increase in its order book and revenues citing moderate domestic economy


Larsen & Toubro (L&T) has announced a 26% increase in its year-on-year (y-o-y) net revenues in its first quarter results ending June 2012. It clocked revenues of Rs11,955 crore compared to Rs9,482.11 crore for the corresponding period of the last fiscal. The company cited a healthy order book which increased 21% y-o-y to Rs19,594 crore for the first quarter of the 2012-13 fiscal. The total order book stood at Rs1,53,095 crore as on 30 June 2012.
 
L&T’s operating profit dipped by 5%, despite impressive sales which increased a little more than its three-quarter y-o-y growth rate (23%). Its operating profit for the current quarter was seen at Rs1086.99 crore, which is less both on a y-o-y basis as well as sequential basis by 5% and by a whopping 57.6%, respectively. Even more so, its last three quarter operating profit y-o-y growth rate has been poor, clocking only an average of 4% growth. The company cited delayed policy measures, slowdown in industrial production, elevated interest rates and liquidity concerns as reasons for dampened growth in operating profit. Given that it is one of the bigger and more reputable names in the construction and infrastructure industry, it commands a valuation premium with its market capitalisation quoting nearly twenty times its operating profit. With the recent string of poor operating profit performance, this looks overvalued. Its return on equity is a respectable 18%.
 
The company, in its press release said, “Going forward, the ensuing months could witness renewed focus on economic reforms for improving the investment momentum and attracting capital inflows. On the international front, select markets in the Middle East, South East Asia and CIS countries hold promising prospects, where company is strengthening its presence.”
 
The company had recorded certain ‘exceptional’ expenditure which saw its net profit for the latest quarter at Rs863.65 crore, 15% higher that the corresponding period last year.
 
The company operates in three segments. Firstly, engineering & construction which contributes to roughly 86% of its topline. The segment order book stood at Rs1,50,656 crore as on 30 June 2012 and recorded an operating margin of 10.9% while the segment increased revenues by 30% y-o-y to Rs10,48,976 crore.
 
The second segment, electrical & electronics segment, recorded revenues of Rs723 crore which didn’t grow much owing to sluggish industrial offtake. Besides, it is too small a number to influence the topline by a significant margin.  Its operating margin was seen at 11.9% for the quarter.
 
The machinery & industrial products segment saw revenues at Rs556 crore of which construction machinery and valves business contributed to much of its 15.5% operating margin for the current quarter ended June 2012.
 
The company’s share price dipped 1.12% to Rs1,374.55 on the Bombay Stock Exchange.

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Captain Lakshmi Sehgal is no more

Captain Lakshmi Sehgal was very active during the Independence movement and had commanded the 'Rani of Jhansi Regiment' of the INA formed by Netaji Subhash Chandra Bose


Kanpur: Captain Lakshmi Sehgal, who was part of Netaji Subhash Chandra Bose's Indian National Army, died in Kanpur on Monday following a brief illness, reports PTI.
 
Sehgal (97), breathed her last at a private hospital at 11.20am, her daughter and noted CPI (M) leader Subhashini Ali said.
 
Sehgal, who was ill for some time, was admitted to the hospital on 19th July after she suffered a heart attack at her residence in Civil Lines area in Kanpur. She was kept on life support system.
 
She was very active during the Independence movement and had commanded the 'Rani of Jhansi Regiment' of the INA formed by Bose.
 
A doctor by profession, Sehgal was working as a medical practitioner and a social worker. She was awarded Padma Vibhushan in 1998.
 
Born as Lakshmi Swaminathan to noted lawyer Dr S Swaminathan and social worker Ammu Swaminathan in Chennai on 24 October 1914, Sehgal obtained her MBBS degree from the Madras Medical College in 1938.
 
In 1940, she went to Singapore for further studies before coming back to India in 1943 to join the INA. She married Colonel Prem Kumar Sehgal in 1947 and had been residing in Kanpur since then.
 
Expressing grief over the demise of Sehgal, senior Communist Party of India (Marxist) leader Brinda Karat remembered her as a "highly politically motivated human being who fought injustice wherever she saw it".
 
"She was a veteran CPI(M) leader and also a great freedom fighter. She served people with every ounce of strength," Karat said, terming Sehgal as a "symbol of courage" and a "symbol of woman's expression".
 
Ali said Sehgal's first love was always her profession. "Just weeks before falling ill, she used to regularly sit in her clinic to see patients," she said, adding that Sehgal would treat everyone who came to her, regardless of whether the patient had money or not.
 
Sehgal, who was residing in Kanpur since 1952, was also very close to her filmmaker grandson Shad Ali, and would "never miss" any film directed by him, her daughter said.
 
Sehgal joined CPI(M) in 1971 and was elected for Rajya Sabha on the party's ticket.
 
She also contested the 2002 Presidential polls against Dr APJ Abdul Kalam as a candidate for Left parties but lost.
 
Sehgal's body will be donated to the CSJM medical college here for medical purposes, Ali said.

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