L&T Q2 Results Preview: Analysts Expect Lower Operating Profit, Margins To Weigh on Earnings

Larsen & Toubro Ltd., India’s largest engineering, procurement, and construction company, is likely to report a subdued second quarter earnings for the financial year 2025.

L&T will report its Q2FY25 earnings on Oct. 30.

The results are likely to be impacted by lower operating profit and operating margins, according to the consensus of analysts' estimates polled by Bloomberg.

L&T’s net profit for the July–September quarter of the financial year 2025 is likely to drop marginally to Rs 3,205.31 crore compared with Rs 3,222.63 crore a year ago, according to analysts' estimates. Revenue from operations, on the other hand, are seen higher by 12.93% year-on-year at Rs 57,621.54 crore on the back of strong order executions during the quarter.

Operating profit or Ebitda is seen lower by 12.8% at Rs 6,141 crore. Operating margins are seen lower by 310 basis points at 10.7%, according to analysts' estimates by Bloomberg.

• Revenue from operations seen 12.9% up at Rs 57,621.54 crore versus Rs 51,024.04 crore a year ago.

• Ebitda seen 12.7% down at Rs 6,141 crore versus Rs 7040.47 crore a year ago.

• Margin seen down 310 basis points at 10.7% versus 13.8% a year ago.

• Net profit seen 0.5% down at Rs 3,205.31 crore versus Rs 3,222.63 crore a year ago.

L&T has underperformed the broader capital goods index for the last six months on concerns related to weaker-than-expected domestic and international orders, a Motilal Oswal report stated.

However, the brokerage believes that despite the muted ordering trends in FY25 so far, there are few positive factors for the company that are in its favour. A strong order book is likely to sustain the healthy revenue growth along with revival in domestic orders inflows after the state elections, it said.

The bottoming out of margins and stable working capital will also support the company, it added.

“We do believe that LT’s near-term performance may be influenced by narratives surrounding state elections and Middle East tensions; however, our long-term thesis on the company stays intact,” the Motilal Oswal report stated.

A slowdown in order inflows, delays in the completion of mega and ultra-mega projects, a sharp rise in commodity prices, increase in working capital, and increased competition are a few downside risks for the company going ahead.