Reports on Mindtree acquisition are purely speculative, says L&T CEO

Larsen and Toubro (L&T) reported a 37 percent rise in consolidated net profit at Rs 2,042 crore in the December quarter. SN Subrahmanyan, MD and CEO of the company, spoke to CNBC-TV18 about the earnings and reports regarding acquisition of Mindtree.

“In our opinion, it has been decent quarter considering the economic situation. Order inflow is Rs 42,000 crore for the quarter i.e. USD 6 billion. For the quarter, maybe we have fallen short but as we keep pointing out to the media and analysts time and again for an infrastructure kind of business to evaluate the performance in order inflow quarter-on-quarter (QoQ) is difficult because sometimes we get a lump in order previous quarter last year and sometimes the same thing does not come through this quarter. However, Rs 42,000 crore was a decent achievement. If you take it on a nine-month basis, we are 16 percent ahead and we have maintained our guidance of 10-12 percent order growth and we believe that we may be able to be more positive on that,” Subrahmanyan said on Monday.

With regards to the full year guidance of 12-15 percent, Subrahmanyan said, “At the moment, we would like to maintain our guidance. It is an election season right now. There could be disbursements and such other matters that is coming up, so one needs to be a bit cautious about it but we are sticking to a guidance and we are quite sure we will achieve that.”

In terms of order inflows, Subrahmanyan said, “I cannot be specific on that but it is good to say that though Q4 predominantly has always been good to us – in the last few years – this year the only shadow if at all is the election dates and the period where the government orders do not move forward because of the restrictions imposed by the election commission and the mandate there on. However, the public sectors will continue to order, the private sector in India will continue to order. We do have prospects in middle-east and Africa, which will continue to come in. So overall, I think there are good prospects in view. We are already L1 in quite a few tenders – L1 is being lower from that point of view of going forward with these orders. So some of these are already leading to that and we still have another two months - some of the jobs have been bid, some of the jobs are under bidding stage, some of the jobs are under final negotiations so we are reasonably confident about it.”

Regarding the Mindtree acquisition reports, he said, “Media seems to be more interested in us buying Mindtree than what we perceive and think. As such, these are all speculative and it is not in the realm right now and I think let us keep it that way right now.”