L&T Q3 Results: Profit Up 17.24% On Execution In Projects, Manufacturing Segments

Larsen & Toubro Ltd.’s third-quarter profit rose on the back of strong order inflows and project execution.

Net profit of India’s largest capital goods company rose 17.24% year-on-year to Rs 3,594.51 crore in the quarter ended December, according to an exchange filing. That compares with the Rs 3,245.7-crore consensus estimate of analysts tracked by Bloomberg.

L&T Q3 FY24 Highlights (Consolidated YoY)

• Revenue from operations rose 18.83% to Rs 55,127.8 crore (Bloomberg estimate: Rs 53,571 crore).

• Ebitda, or operating profit, increased 13.52% to Rs 5,759 crore (Bloomberg estimate: Rs 5,984.7 crore).

• Ebitda margin fell 48 bps to 10.44% vs 10.93 a year ago (Bloomberg estimate: 11.2%).

• Net profit surged 17.24% to Rs 3,594.51 crore (Bloomberg estimate: Rs 3,245.7 crore).

Order inflows in the third quarter rose 25% YoY to Rs 75,990 crore at the group level. Orders flowed across various business segments, like the offshore vertical of hydrocarbon division, solar EPC and power transmission business, water utilities, buildings and factories, and minerals and metals segments.

International orders constituted 67% of the total order inflow during the quarter at Rs 50,562 crore.

Order inflow during April-December 2023 rose 49% YoY to Rs 2,30,662 crore. International orders at Rs 1,37,894 crore constituted 60% of the total inflow for the period.

The consolidated order book was at Rs 4,69,807 crore as on Dec. 31, 2023, with international orders having a share of 39%.

The company has revised its FY24 order inflow guidance of 10-12% upwards to 20%, given the strong visibility of order inflow from domestic and international projects, said R Shankar Raman, whole time director and chief financial officer of L&T.

The company expects to exceed the revenue guidance of 12-15% as well. "We see the revenue guidance in high teens," Raman said.

The supply chain disruption in the Red Sea channel is a matter of concern as it's an important channel for logistics, Raman said. "We have started working on new routes and there will be discussions on additional costs and its compensation."

However, the growth momentum in the region continues as countries in the Middle East are now focused on investments to achieve decarbonisation targets, he said.

L&T had emerged as the largest EPC player in the Middle East and MENA region in the previous quarter, and several of its large projects come from that region.

However, these projects take time before they reach the execution stage. Hence, there is no impact to these projects at present, he said.

Shares of L&T closed 2.02% down on the BSE, as compared with a 1.11% fall in the benchmark Sensex.

(Corrects an earlier version which misstated Ebitda and margin)