L&T has reported Sales & Service revenues of Rs. 2446 crore for the quarter ended 31.12.2002, registering an impressive increase of 30% over the corresponding quarter last year. Profit before tax and profit after tax at Rs. 87.56 crore and Rs.80.67 crore have risen sharply by 40% and 48% respectively. The highlight of the performance has been the continued success in securing prestigious export orders/overseas projects.

Sales & Service income for the nine months ended 31st December 2002 amounted to Rs. 6551 crore, representing a 20% increase over the comparable period last year. Aided by the performance for the third quarter, the Company achieved cumulative Profit before tax and Profit after tax of Rs.198.47 crore and Rs.167.47 crore respectively, marginally bettering the performance for the previous year.

The performance for the nine-month period reflects lower operating margins largely due to subdued cement prices and competitive pricing strategies adopted for securing orders for overseas projects/equipment supplies. The export market thrust has been an integral part of the Company's business strategy to counter limited opportunities in the domestic market.

Engineering & Construction
The E&C segment booked orders worth Rs. 5165 crore, which represents an increase of 9%. The domestic capital goods sector continues to be sluggish with investments confined to a few sectors like Refineries and Infrastructure. The Company continues to maintain its leadership, evidenced by the large, complex orders bagged.

The strategy to de-risk the business portfolio by seeking opportunities abroad has yielded further results. Against global competition, the Company has secured orders in the Middle East, United States and Tanzania. The export order booking increased two-fold to Rs. 1396 crore, as against Rs 465 crore in the previous year.

The details of major orders secured by E&C segment during the quarter-ended 31.12.2002 are:

The segment recorded a turnover of Rs 3880 crore as against Rs 2998 crore during the same period last year. The increase of 29% largely reflects the progress on the overseas power plant jobs being executed. Export sales have grown impressively from Rs. 394 crore to Rs. 1016 crore.
Order backlog at Rs. 11594 crore continues to be robust.

Cement
The Cement Division recorded production of 2.88 million metric tonnes (MMT) during the quarter as against 2.50 MMT in the comparable period last year, registering an 15.2% growth. Domestic Sales of Cement and Clinker increased by 14% to 2.52 MMT. Reflecting the subdued cement price scenario, the average domestic sales realisation fell 7.6% to Rs. 1271 per metric tonne (pmt) vis-à-vis Rs. 1375 pmt in the corresponding quarter previous year.

During the nine-month period under review, Sales revenues aggregated to Rs.1966 crore, recording a marginal increase over the previous year. Quantity of cement sold in the domestic market at 7.76 MMT showed a growth of 12% as against 9.4% for the industry. However, the reduction in average domestic price realisation from Rs.1435 pmt to Rs 1246 pmt adversely impacted the profitability. The company's continued efforts to reduce costs helped achieve considerable savings in fixed costs and variable costs, which mitigated the impact.

Electrical & Electronics
During the nine-month period, the Electrical & Electronics segment has achieved a 14% increase in revenues, from Rs.510 crore to Rs 580 crore, in the face of competition from MNC majors in several business lines. The segment continued to grow impressively in export sales, which grew 45% to Rs.28 crore during the period April-December 2002. Operating margins have also improved by 2 percentage points to 13.1%, with continued thrust on cost reduction and new product intensity/product variants.

Outlook
The E&C segment is expected to show a growth of over 20% in revenues for the full year. Operating margins are expected to be better in the last quarter resulting in overall improvement in margin for the year. Barring unforeseen circumstances, the Company is optimistic of a good performance for the year as a whole.