BEST TIME INVEST IN L&T SHARES

By: Bharat Ratna

L&T announces 1:1 bonus

Net jumps 55 p.c. to Rs. 2,173.42 cr. in 2007-08

Recommends a final dividend of Rs. 15 per share

A. M. Naik (left), Chairman and Managing Director, and V. M. Deosthalee, Chief

Financial Officer, L&T, addressing a press conference in Mumbai on Thursday

L&T bets on growth

Engineering and construction major Larsen & Toubro is targeting an order book in excess of Rs 60,000
crore in 2008-09 even as it does not foresee any negative impact from a possible economic slowdown?
This year, the order position intake at the moment looks as bullish as last year. L&T would continue to
grow at 30-35 per cent, a company official said. For the year ended March 31, the group reported a
consolidated net profit of Rs 2,325.36 crore, a marginal growth over the year-ago period. The firm had a
net profit of Rs 2,240.14 crore in FY2007.

The total income rose to Rs 29,848.59 crore in FY-2008, from Rs 20,911.61 crore in the previous fiscal.
The board has declared a total dividend of Rs 17 each, on every share of face value of Rs 2, for 2007-08.
The company has an order backlog of more than Rs 53,000 crore and targets an order book in excess of
Rs 60,000 crore in financial year 2009, L&T chairman and managing director A.M. Naik said. Our order
backlog would take care of revenue for the next year.?

Even if there was some slowdown in India’s economic growth, L&T, being in energy, oil and the refining
sectors, would not face any impact this fiscal, he said? The recent slowdown in the industrial sectors,
coupled with rising input costs, particularly oil, and the credit squeeze may have an impact on the capital
goods sector’s ability to sustain growth momentum in the medium term,? Naik said. We have improved
our margin by one per cent, including in our engineering and construction segment, which was already at
about 12 per cent, we have made it more than 13 per cent. This absorbs all the cost increase, all the
commodity prices volatility and so on. However, in view of the pace of infrastructure development in the
region, the prospects for growth app-ears promising and the company was reasonably confident of
producing healthy results, he said.
In a difficult environment of rising costs, Larsen & Toubro (L&T) has announced a rise of 38
per cent in its net profit at Rs. 966.76 crore for the fourth quarter ended March 2008
against Rs. 700.77 crore in the corresponding period in the previous year. Excluding
exceptional items of Rs. 87.23 crore (relating to profit on dilution of equity in a project), the
net profit was up 27 per cent. For the quarter, the company’s gross sales and service
revenues were up 35 per cent at Rs. 8,577.55 crore (Rs. 6,365.40 crore). Operating
margins were up at 15.9 per cent (15.5 per cent) and order inflows grew 56 per cent.

The board of directors of the company has recommended a final dividend of Rs. 15 per
share. The company has already paid an interim dividend of Rs. 2 per share. The board has
also recommended an issue of bonus equity shares in the ratio of 1:1 (one bonus equity
share of Rs. 2 for every equity share held).

The operating profit for the year at Rs. 3,405 crore grew by 54 per cent which translates
into an improvement in the operating margins by one percentage point at 13.6 per cent.

Strong infrastructure and industrial growth, buoyant market for capital the goods sector and
a sound risk management framework contributed to the growth in the company revenues
and profitability. Speaking on the impact of the economic slowdown at a press conference
here on Thursday, A. M. Naik, Chairman and Managing Director, L&T, said, “L&T is organised
into 15 companies and there is a fairly good hedge against a slowdown in any one sector
with new operating companies in shipbuilding, power and railways.”

L&T is prepared for the Middle East and Gulf regions and “a slowdown in this region has
been factored in so we are not changing our outlook.

As in the past we will see a 32-35-per cent growth and we will be able to maintain margins.”

On rising costs, Mr. Naik said, “we do not accept fixed price for project executions, in fact, of
the new jobs last year, 60 per cent were accepted on the cost plus basis. About 20-25 per
cent of our projects have to be on a firm price basis but then we take sufficient
contingencies into account.”

L&T is not planning to list any group company immediately but will list its information
technology, financial services and development projects holding company. In all likelihood,
the IT company would list in 2009-10 and others would list in successive years, said Mr.
Naik.

REALTY PUSH
L&T is present in the realty business through L&T Realty, a holding company for all realty
projects which come up as special purpose vehicles (SPVs).

It is investing up to Rs. 4,000 crore in a project in Navi Mumbai which will come up around
the Sea Woods Railway station, covering 40 acres. It will boast parking space for 6,000
vehicles, office buildings, malls, clubs and serviced apartments.

CLOSED PRICE ON 29 MAY 2008 is Rs.2882.25, 52-Week Range (Low - High) : 1860.00 -
4690.00, Stock Performed 54% hike in last year (Upto Jun30’08). Stock will definitely reach last
year high of Rs.4690 within six months. This is STRON BUY PICK for buyers with a duration of 6
months