Larsen and Toubro workers at a construction site near Ahmedabad in Gujarat. Photo: AFP

The ongoing Covid-19 pandemic and a series of lockdowns to contain its spread have taken a heavy toll on the bottom line of the engineering conglomerate Larsen & Toubro. For the April-June quarter the company’s net profit was down 68% to 5.36 billion rupees (US$72 million), as against 16.97 billion rupees ($227 million) in the year-ago quarter due to a sharp decline in orders and the stalling of projects.

The income for the quarter dropped 27% to 220.37 billion rupees ($2.95 billion), while the consolidated gross revenue registered a 28% decline on year-on-year to 212 billion rupees ($2.84 billion).

The company said in a statement that for most of the quarter, it had to focus on the safety of its workforce, transition to productive remote working, staying engaged with all its stakeholders, conserving resources and resuming business in a careful manner. The company also had to struggle to meet its project deadlines as a large number of workers had left for their villages during the lockdown.

Larsen & Toubro booked new orders worth 235.74 billion rupees ($3.16 billion) in the June quarter, 39% lower than the year-ago quarter, as the inflow of fresh investment got hit.

The stoppage of Andhra Pradesh projects, a delay in the Mumbai coastal road project and metro project have slowed down progress in the overall order book. Many cement and steel companies are putting off their capital expenditure plans because of the disruption caused by the pandemic.

In its outlook the company expects the Indian economy to recover in the latter part of this fiscal year, with partial lifting of lockdown and graded resumption of business operations. The company sees opportunities in government buildings, data centres, healthcare infra, airports, metro rail, water projects, hydel projects, expressways, and hydrocarbon (onshore and offshore) projects.

Many rating agencies have forecast that the Indian economy is expected to contract for the first time in four decades due to the downturn caused by the pandemic.