L&T Shares Give Negative Returns For First Time In Seven Quarters Between Earnings
The return on L&T shares between two quarterly results—or between Jan. 30 and May 8—was at negative 9.8%.
Larsen & Toubro Ltd. shares fell 6% on Thursday, a day after the company reported better-than-estimated fourth-quarter results. It is also the first time in the last seven quarters, in between results announcements, that the shares gave a negative return.
The return on L&T shares between two quarterly results—or between Jan. 30 and May 8—was negative 9.8%. In the previous seven quarters, the company shares gave returns between 4.5% and 24% on the back of a rising order book, growing project executions and a margin that had shown a positive upward trend after Covid-19.
The last time L&T shares gave a negative return was in the fourth quarter of fiscal 2022, when it fell 19.57%.
The fourth quarter drop in returns can be attributed to the period before elections, when order inflows and project executions took a hit. Order inflows in the fourth quarter of FY24 dropped 5% YoY to Rs 72,150 crore. The infrastructure margin, too, was affected by supply chain costs and logistics issues.
L&T Q4 FY24 Highlights (Consolidated, YoY)
Revenue from operations rose 15% to Rs 67,079 crore (Bloomberg estimate: Rs 65,868.99 crore).
Operating profit, or Ebitda, increased 5.9% to Rs 7,234 crore (Bloomberg estimate: Rs 7,156.99 crore).
Operating margin narrowed 90 bps to 10.8% versus 11.7%.
Net profit rose 12.4% to Rs 5,013 crore (Bloomberg estimate: Rs 4,017.63 crore).
FY25 Revenue, Order Inflow Guidance Lower
L&T's management has guided lower revenue and order inflow growth in FY25 as compared with FY24.
The infrastructure conglomerate has guided for 10% order inflow growth in FY25, as against 20% in FY24. Revenue guidance is also lower at 15%, as compared with 21% a year before, on account of elections and monsoons that are likely to impact the first half of FY25.
The company expects the first half of FY25 to likely be disrupted by elections, primarily due to labour movement away from site locations for voting, which would be followed by a monsoon affecting project execution.
The consolidated order book of the group, as of March 31, was at Rs 4.76 lakh crore, a growth of 20% over the previous year, with the share of international orders at 38%.
