MUMBAI (Reuters) - Construction and engineering group Larsen & Toubro(LART.NS) 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 (BHEL.NS), 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