L&T Q1 Results Review - Order Inflow Strong; Execution To Improve From H2: Centrum

Centrum Broking Report

Larsen and Toubro Ltd. reported good set of results for Q1 FY25 as revenue was ahead of our estimate by 8.7% but Ebitda was largely in-line. Higher execution in international orders kept margins in check as core engineering and construction business reported margins of 7.5%, flat on YoY basis and down 200 bps on QoQ basis.

Order inflow and backlog remained buoyant with 8%/19% YoY growth respectively as order momentum from middle east remained high. Core E&C revenue reported 18% YoY growth largely driven by higher execution in international orders.

Total orderbook stands at Rs 4.9 trillion with 62% domestic contribution and 35% from middle east. Prospects pipeline at Rs 9.07 trillion is lower compared to Rs 12 trillion at the start of the year.

Increased international mix in the backlog and increased competition in domestic EPC business coupled with delays in claim acceptance and claim settlements will continue to exert pressure on core E&C margins.

As a result, we have increased our revenue assumption marginally higher whereas margin assumption is lower. We maintain our Add rating on the stock with revised target price of Rs 3,745.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.