Engineering and construction giant Larsen & Toubro has said the Bombay High Court has nullified a ₹2,237 crore GST demand against the company on August 20. The company had previously filed a writ petition in the Bombay High Court challenging a show cause notice issued by the Principal Commissioner of GST and Service Tax, Mumbai. The notice pertained to a service tax demand of ₹2,237 crore involving a former subsidiary, with the tax already paid by the company after a demerger.
Following this announcement, shares of the engineering and construction giant surged as much as 1.14% to ₹3,615.00 apiece in early trading hours today.
At the time of reporting, shares of L&T were trading at ₹3,600.05, up 0.72% from the previous close of ₹3,574.20. The stock opened higher today at ₹3,589.00. The construction giant boasts a market capitalisation of ₹4,95,417.54 crore. L&T’s stock has dropped 1.31% over the past month, surged 9.32% in the past six months, and risen 2.22% year-to-date (YTD).
The high court, in its August 19 order, ruled in favour of the company, quashing the show cause notice issued by the GST authorities, the company states in a filing.
In a separate development on August 14, Larsen & Toubro International FZE (LTIFZE), a wholly-owned subsidiary of L&T, signed a Share Purchase Agreement with The Wave Development SPC, to acquire an additional 15% stake in Larsen & Toubro (Oman) LLC (L&T Oman), a joint venture between LTIFZE and Wave. Following the acquisition, LTIFZE will hold an 80% equity stake in L&T Oman.
Larsen & Toubro posted a 12% year-on-year (YoY) increase in net profit, reaching ₹2,786 crore for the quarter ending June 30, up from ₹2,493 crore in the same period the previous year. The company also recorded a 15% YoY growth in revenues, reaching ₹55,120 crore. Of this total, 48% was generated from international markets.
This increase in consolidated net profit and the revenue growth were primarily driven by the strength of L&T's Projects & Manufacturing portfolio and a robust order book. Notably, 48% of the total revenue came from international markets.
Fuelled by significant order growth in the Middle East, the company secured orders worth ₹70,936 crore at the group level, marking an 8% YoY increase in the first quarter. International orders made up 38% of the total, bringing the group’s consolidated order book to ₹4.9 lakh crore as of June 30, 2024.
Additionally, the company’s EBITDA rose by 15% YoY, from ₹4,869 crore to ₹5,615 crore.
