Larsen & Toubro Ltd (L&T), engineering and infrastructure major, on Saturday reported a 26.9% in net profit to Rs 1820 crore but it said that it won’t be able to meets its order inflow growth of 12-14% in the financial year 2017-18. In anticipation of good results, in a subdued market, L&T’s shares moved up 4% to touch 1264.50, its 52-week high.

The reported net profits beat analysts estimates by a wide margin. The consensus estimate of Bloomberg analysts was Rs1,223 crore. The profits however included an exceptional gain of Rs 136.7 crore on account of the company’s divestment of a subsidiary.

“In so far as orders are concerned, we have looked at the pipeline once again as we regularly do. And we have also factored in that we are delayed by close to three months in terms of orders that we were expected to win. Considering that at the half year are at about -9%, our assessment is that we might pretty much land similar to the orders we reported in the previous year with the possibility of a marginal improvement,” R. Shankar Raman, L&T’s whole time director and chief financial officer, said at a press conference post the company reported its September quarter earnings

L&T said it won’t be able to meet its order inflow guidance of a growth of 12-14% in the financial year 2017-18 citing a subdued domestic environment for investments.

The company secured orders worth Rs 28,732 crore during the quarter, lower by 7.7 percent year-on-year but higher by 9 percent over previous quarter.

"Order inflow for the half year ended September 2017 stood at Rs 55,084 crore. Major orders were received by infrastructure and hydrocarbon segments," L&T said.

Consolidated order book of the group was higher by 2 percent YoY at Rs 2.57 lakh crore with international order book constituting 26 percent, it added.

Infrastructure segment grew by 3.4 percent year-on-year to Rs 11,988.7 crore, with its EBIT (earnings before interest and tax) rising 13 percent.

"Order book of infrastructure segment as of September 2017 at Rs 1.9 lakh crore marginally increased by 2 percent YoY, reflecting the slower pace of new orders," the company said in its results statement. .

Hydrocarbon business increased 2.4 percent to Rs 2,561.40 crore, with a whopping EBIT growth of 73.4 percent at Rs 248 crore for the quarter.

Development projects segment for the quarter registered 32 percent growth at Rs 1,415.7 crore and its EBIT grew by 255 percent to Rs 378 crore YoY. The segment had reported a loss of Rs 49 crore at EBIT level in June quarter.

The power business declined 4.4 percent year-on-year to Rs 1,667.3 crore but posted a 91.7 percent growth in EBIT at Rs 79 crore.

For the year ahead, Raman, however, said that the company will be able to meet the revenue guidance of a 12% growth for the full year.

S.N. Subrahmanyan, L&T’s MD & CEO, blamed the headwinds it was facing in the Middle East due to the turmoil in Saudi Arabia, the embargo of Qatar and the slowdown in Oman and Kuwait for the gloomy forecast for its order book.

In case of India, there are plenty of projects, like the river interlinking scheme, the Namami Gange scheme, the Bharatmala scheme, etc., which are being announced. However, new regulatory environment with new laws like the RERA, IBC etc. has led to tendering and decision making slowing down, Subrahmanyan said.