MUMBAI, May 29: Although the total income of Larsen & Toubro Ltd (L&T) has increased to Rs 5,305 crore during the year ended March 1997 from Rs 4,249 crore in the previous year, an incrase of 25 %, the net profit has shown a lower increase of only 5.8 %. The directors have, however, maintained the dividend at 60 %.

S D Kulkarni, managing director and chief executive officer, said that due to the higher incidence of tax on account of applicability of minimum alternative tax (MAT), the net profit shows a lower increase. The slowing down of the economy during the second half of the year had resulted in lower order booking . ``Besides the operations at the company's Bangalore works, which manufactures earthmoving machinery, were affected during the year due to a three-month strike, which has since been called off,'' he said.

Larsen has earned a higher gross profit of Rs 648.70 crore against Rs 569.47 crore last year. After depreciation of Rs 175.60 crore (Rs 139.78 crore), taxation of Rs 61.75 crore (Rs 41 crore), the net profit amounted to Rs 411.35 crore against Rs 388.69 crore. The proposed dividend including additional tax on dividend will absorb Rs 164.31 crore against Rs 138.41 crore. The reserves and surplus as at the end of year stood at Rs 2856.33 crore (Rs 2,627.22 crore) on an equity capital of Rs 248.49 crore against Rs 248.47 crore.

Kulkarni further said that during the year, the company booked orders worth Rs 5638 crore representing a 22 % increase over the last year. The company expects significant pick-up in order booking in the second half of 1997-98. The company also expects good business from infrastructure sectors such as power, roads/bridges, ports, telecom etc on BOO or BOT basis. The company has recently recieved a leter of intent from Haldia Petrochemicals for a captive power plant on BOO basis.

He said with the commencement of production at the company's Gujarat Cement works and higher capacity utilisation at other plants, cement production rose to 5.4 million tonnes during the year against 3.8 million last year.

However, due to the perceptible slow-down in construction activities from the later half of year, low investment in infrastructure areas and overall slowing down on the economy, cement prices were very much depressed.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.