L&T's net income surges 40% on strong orders from Mideast

Mumbai: Larsen & Toubro Ltd, India's biggest engineering company, posted a better-than-expected fiscal third-quarter profit and increased its sales forecast for the year after winning more orders at home and in the Middle East.

Net income in the three months ended December 31 climbed 40 per cent to Rs4.82 billion, or Rs16.21 a share, from Rs3.44 billion, or Rs11.24, a year earlier, Mumbai-based Larsen said.

Six analysts in a Bloomberg News survey had a median estimate of Rs4.46 billion. Sales rose 55 per cent to Rs63.8 billion.

Larsen, which held its board meeting in Dubai, the first time overseas, is winning orders for golf courses and power plants in Oman, helped by an oil-driven construction boom.

The company is also securing orders for blast furnaces for steel mills in India as rising prices spur local steelmakers to expand.

"Larsen stands to gain most from the growth in oil-rich economies and also locally as it is the leader in the high-tech engineering sector," said R.K. Gupta, CEO at Credit Capital Asset Management said.

Larsen's shares pared declines after the results were announced yesterday. The stock, which fell 5.5 per cent in the morning, closed at Rs3,844.5, down 1.2 per cent.

The firm aims to boost the share of its overseas business to 30 per cent from 20 per cent in the next five years, helped by expansion in the Middle East and China.