Revenues for the year up by 21%
Net Profit for the year up by 25%

May 29, 2003: L&T has reported Gross Sales & Service revenues of Rs.3319 crore for the quarter ended 31st March 2003, registering an impressive increase of 23% over the corresponding quarter last year. Profit before tax and Profit after tax for the quarter at Rs.311.73 crore and Rs.265.63 crore have increased by 48% and 42% respectively. The highlight of the quarter's performance is the significant growth in the revenues of the E&C segment.

Gross sales & service income for the year ended 31st March 2003 amounted to Rs.9870 crore, representing a 21% increase over the comparable period last year. Aided by the strong performance in the fourth quarter, and a significant saving in interest cost, the Profit Before Tax and Profit After Tax of the Company at Rs.510.20 crore and Rs.433.10 crore respectively have shown an increase of 27% and 25% respectively over the last year.

Engineering & Construction
The E&C segment booked orders worth Rs.4337 crore during the quarter, while the order booking for the full year is Rs.9502 crore, which translates into an annual increase of 29%. During the year, the Company received, among others, an order from Indian Oil Corporation, Panipat, for setting up a PTA facility. The order is valued at Rs.1242 crore, the largest in the Indian E&C business history.

The domestic capital goods sector showed some signs of revival during the year, but could not provide enough opportunities, barring a few sectors like petrochemicals, oil & gas, infrastructure and roads. The E&C segment received several large orders in these areas and also did well in its foray into overseas projects, securing orders from various countries, viz., Kuwait, Qatar, the UAE, Tanzania, China and the USA against stiff international competition. The export order booking for the year increased two-fold to Rs.1937 crore, as against Rs.886 crore in the previous year.

The details of major orders secured by the E&C segment during the quarter ended 31st March 2003 are:

The segment recorded a turnover of Rs.2274 crore during the quarter. For the full year, sales amounted Rs.6148 crore, reflecting an impressive increase of 34% over the last year. Export sales have also grown significantly from Rs.848 crore to Rs.1276 crore, recording an annual increase of 50%. The order backlog position is robust at Rs.13687 crore as at 31st March 2003, reflecting an increase of 24% over the last year.

The operating margins of E&C segment for the year are lower largely on account of entry pricing strategies in overseas markets and higher provisioning requirements for doubtful debts and employee retirement benefits.

Cement
Domestic Sales of Cement & Clinker during the quarter increased by 9% to 2.79 MMT. The average sales realisation for the quarter improved marginally to Rs. 1289 pmt from Rs.1265 pmt in the corresponding quarter of the previous year.
For the full year, the segment's gross sales revenues increased by 4% to Rs.2582 crore as against Rs.2486 crore in the previous year. Quantity of cement sold in the domestic market at 10.47 MMT shows a growth of 11% as against cement consumption growth of 8.7% for the year. However, the reduction in average domestic price realisation from Rs.1420 pmt to Rs.1276 pmt as also the increases in input costs like coal and petroleum products adversely impacted profitability. Continued efforts to reduce energy, material and logistics costs helped mitigate the impact. Overall, the operating margin of the segment for the year was 15.2 % vis-à-vis 19.3% for the previous year.

Electrical & Electronics
During the year, the Electrical & Electronics segment has achieved a 11% increase in gross sales revenues, from Rs.706 crore to Rs.781 crore. Aided by quality initiatives, product innovation and a strong distribution network, the segment did well to protect its market share in the face of severe competition from MNC majors in most of its product lines. Simultaneously, the operating margins have also improved to 14.6%, with continued efforts on cost reduction and high new product intensity.

Interest Cost
Interest cost of the Company for the year amounted to Rs.177 crore, as against Rs.316 crore for 2001-02, resulting in substantial savings. The year under review witnessed a comfortable liquidity position for the Company enabling reduction of debt. Further, retiring high cost debts where possible and proactive interest risk management helped reduce the interest cost.

Outlook
With a strong order backlog, the E&C segment is expected to show a good growth in revenues in the next year. Cement segment is expected to witness a stable price scenario, considering the fact that no capacities are being added other than de-bottlenecking of existing capacities to some extent.

Barring unforeseen circumstances, the Company is optimistic of a satisfactory performance for the year 2003-04.