The board has recommended a dividend of Rs 6.50 per share, up from Rs 6 per share last year. The earnings per share works out to Rs 21.39.

Managing director and chief executive officer SD Kulkarni said 1997-98 was a difficult year for the domestic industry, and when viewed against this backdrop, L&T had done well. While industrial production grew at 4.2 per cent, this was 3 per cent in the case of manufacturing, and a negative growth for the capital-goods sector. Kulkarni said a major contributor to L&T's showing was the revenue on spinning off the Bangalore construction business as a joint venture with Japan's Komatsu, which fetched Rs 108 crore.

On the present scenario of excess cement capacity, he reiterated that "we are along-term player and India will need cement in the years to come."Production of cement and sale of clinker went up to 6.7 million tonnes, against 5.5 million tonnes. The second phase of the Gujarat cement plant was commissioned in March as also the first phase of the Tadapatri plant in Andhra Pradesh. Larsen & Toubro exported 10.76 lakh tonnes of cement, giving it a premier share of 25 per cent in the export market.

According to Kulkarni, L&T would focus on key areas, which included the major business of engineering, procurement and construction (EPC), cement, switchgears and power. "We should be able to sustain the rigours of competition, and want to be a world-class company," Kulkarni said.

According to a release issued here on Friday, L&T booked orders worth Rs 6,440 crore, representing a 14 per cent rise over the previous year. The backlog of orders as on March 31 is Rs 5,250 crore, a jump of 22 per cent over 1997. On Friday,, the L&T scrip slipped marginally on the Bombay Stock Exchange closing atRs 255.70 against Thursday's close of Rs 258. On the National Stock Exchange, it was quoted at Rs 256.20 compared to Thursday's Rs 259.10.

Insight
Given the present state of the economy, L&T has performed appreciably. But for the one-time income from sale and transfer of construction equipment for Rs 108.19 crore, net profit is up by only 2.9 per cent, an increase of only Rs 11.9 crore. This has been possible mainly because of a lower tax provision owing to the company's link with infrastructrure projects, which are exempt from tax.

L&T increased its order book by 14 per cent to Rs 6,440 crore, and the order-book backlog increase of 22 per cent to Rs 5,250 crore is creditable.What is more important is that most of the orders are from refinery and other infrastructural projects, which will enjoy tax shelters. Further, an increase in installed capacity of cement to 10.65 million tonnes is likely to ensure volume growth. Any increase in cement prices will only help the bottomline. With no increasein freight rates in the railway budget, input costs are likely to remain more or less stagnant.