L&T Q2 Results Live Updates: Net profit rises 45% to ₹3,222 crore, order book up 72% YoY

• Highest ever quarterly order inflow aided by ultra mega Hydrocarbon orders in GCC

• International orders constitute 35 per cent of the Sep’23 order book

• Robust prospects pipeline at ₹8.8 trillion in the near term

L&T appointed Ajay Tyagi as an Independent Director of the company for a term of five years with effect from October 31 , 2023 upto October 30, 2028, subject to approval of shareholders of the company.

P. R. Ramesh has been appointed as an Independent Director of the Company for a term of 5 years with effect from October 31, 2023 upto October 30, 2028, subject to approval of shareholders of the company.

Headwinds from global economic slowdown and declining global trade continue to pose event risks. Further, volatile energy and food prices in the wake of lingering geopolitical tensions and adverse weather conditions render uncertainty to the inflation outlook, said L&T.

While major central banks are signaling a peaking of their rate hike cycle, there are indications that the tight monetary policy stance could persist for longer than expected.

The recent conflict in the Middle East has raised concerns about potential increase in crude prices that can worsen the already fragile global economic situation, as the region is a crucial supplier of energy and a key shipping gateway to global trade, said the company.

The company backed by its all-round capabilities in engineering, manufacturing, construction, project management and services will continue to focus on operational excellence and cost competitiveness for profitable execution of its large order book. 

The company pursues its stated objective of demonstrating profitable growth with judicious use of capital and maximize shareholder value on a sustainable basis, said L&T in its exchange filing.

L&T reported a 19 per cent rise in consolidated revenue for Q2FY24 to ₹51,024 crore, compared to ₹42,763 crore in the corresponding quarter in the previous fiscal. Higher-than-expected sales growth was driven by execution tailwinds in the infrastructure projects segment and sustained growth momentum in the IT and ITeS portfolio, said the infra major in its exchange filing.

S.N. Subrahmanyan, Chairman and Managing Director said: “Our strong operating and financial performance this quarter exhibits the resilience of the company’s business model despite the on-going volatile geo-political situation.

All our businesses – Projects, Manufacturing and Services have grown. During the quarter, we have received the highest ever order inflows in the history of the company.

The company now tops the list of international EPC Contractors working in the MENA region in terms of value for projects under execution. The company has successfully completed the first ever Buyback of Equity Shares during the quarter, in alignment with our long-term Lakshya 2026 plan to enhance shareholder value.

In the near term, we remain cautiously optimistic, considering the recent geopolitical developments. However, we do expect sustained buoyancy of services and government’s thrust on capex to continue.\”

On a cumulative basis, the order inflow for the half-year ended September 30, 2023 stood at ₹154,672 crore, registering a growth of 65 per cent over the corresponding period of the previous year. International orders at ₹87,333 crore during the half-year constituted 56 per cent of the total.

The consolidated order book is at ₹450,734 crore as on September 30, 2023, with international orders having a share of 35 per cent.

The Company received orders worth ₹89,153 crore at the group level during the quarter ended September 30, 2023, registering a robust growth of 72 per cent on y-o-y basis. During the quarter, orders were received across diverse segments like Onshore verticals of the Hydrocarbon business, Urban Transit systems, Transmission & Distribution as well as Residential & Commercial Space. International orders at ₹59,687 crore during the quarter comprised 67 per cent of the total order inflow.

Larsen & Toubro achieved consolidated revenue of ₹51,024 crore for the quarter ended September 30, 2023 recording a y-o-y growth of 19 per cent, primarily aided by improved execution of the large order book and accelerated progress in the Projects and Manufacturing portfolio. International revenues during the quarter at ₹21,898 crore constituted 43 per cent of the total revenue.

-Net profit, revenue
-Order pipeline
-Pace of execution of orders
-Management Commentary

Net profit is likely to grow to ₹2,721 crore, according to the estimates of six brokerages. The company\’s revenue may rise 17 per cent to ₹50,093 crore in the  September quarter over improved construction activity.

‘’We wish to inform you that the Nomination & Remuneration Committee (NRC) of the company has approved allotment of 1,49,598 equity shares to those grantees who had exercised their options under the company’s employee stock option schemes,\’\’ said L&T in its exchange filing today

The Hydrocarbon Business (L&T Energy Hydrocarbon – LTEH) of Larsen & Toubro (L&T) has secured Letter of Intent for yet another ultra-mega onshore project from a prestigious client in the Middle East further to the recent ultra-mega project award for a gas compression plant.

The scope of work comprises engineering, procurement, & construction for gas processing plant consisting of Inlet Separation Facilities, Booster Compression System, Amine Gas Recovery Unit, Dehydration Unit, Mercury Removal Unit, NGL Recovery Unit and Sales Gas Compression System in new onshore facilities and its integration with existing Gas Processing Plants.

Snapping their two-day winning run, frontline indices Nifty 50 and the Sensex resumed their downward march on Tuesday, October 31, amid mixed global cues. Nifty 50 closed the day at 19,079.60, down 61 points, or 0.32 per cent while the Sensex ended with a loss of 238 points, or 0.37 per cent, at 63,874.93.

L&T reported a 46.5 per cent year-on-year jump in consolidated net profit to ₹2,493 crore with a 33.6 per cent increase in revenue to ₹47,882.4 crore for the April-June period. 

Ahead of Q2 results, shares of L&T settle 0.16 per cent higher at ₹2,931 apiece on the BSE

Kotak Institutional Equities expects L&T’ Q2FY24 net profit to rise 29.4% to ₹2,884.3 crore from ₹2,228.9 crore in the year-ago quarter. The company’s revenue is expected to rise 18.7% to ₹50,738.2 from ₹42,762.6 crore, YoY.

The brokerage firm estimates L&T’s EBITDA during the quarter to increased 8.8% to ₹5,329.3 crore from ₹4,899.4 crore, while EBITDA margin to contract by 96 bps to 10.5% from 11.5%, YoY.

While L&T\’s new order announcements stand at ₹26,000 crore in July+August, Goldman Sachs thinks its order inflow estimate for the core business at ₹49,600 crore, or 27% YoY growth (excluding the potential ₹32,400 crore order from Saudi Aramco) is likely to be met, as L&T reports orders even after the quarter end. 

With full year guidance of 10%-12% on order inflow (vs our expectation of -30% growth for the Core business), we think L&T is likely to raise its guidance, despite 2H being closer to the general election – which typically sees slowdown in order inflow, Goldman Sachs said.

The strong orders, coupled with continued flow of working capital should drive better execution, and we expect Q2 revenue to grow 16% YoY to ₹494 billion, Goldman Sachs said. Within this, we expect the revenue from the core business to grow at ~ 17% YoY suggesting strong execution. We expect execution to remain strong and expect 23% revenue growth for L&T\’s Core business in FY24, it added.

Goldman Sachs expects strong YoY growth in order inflow, revenue and net income (double-digit YoY) – reflecting the next few years of trends that it expects L&T to deliver in terms of growth.

While L&T\’s new order announcements stand at ~ ₹26,000 crore in July+August, we think our order inflow estimate for the core business at ₹49,600 crore, or 27% YoY growth (excluding the potential ₹324 billion order from Saudi Aramco) is likely to be met, as L&T reports orders even after the quarter end. 

With full year guidance of 10%-12% on order inflow (vs our expectation of -30% growth for the Core business), we think L&T is likely to raise its guidance, despite 2H being closer to the general election – which typically sees slowdown in order inflow, Goldman Sachs said.

L&T share price has fallen over 3.5% in the last one month. However, the stock has risen over 8.7% in the past three months and nearly 40% year-to-date (YTD). L&T shares have given over 44% return in one year and more than 213% returns in three years.

Brokerage house Prabhudas Lilladher expects L&T’s net profit in Q2FY24 to rise 19.3% to ₹2,659.5 crore from ₹2,229 crore in the year-ago period. It estimates sales during the quarter to increase 17% to ₹50,030 crore from ₹42,762.6 crore, YoY.

EBITDA is expected to grow 10.4% to ₹5,404.1 crore from ₹4,893.8 crore, while EBITDA margin may contract to 10.8% from 11.4%, YoY, as per Prabhudas Lilladher.

Phillip Capital expects L&T\’s order inflows at over ₹85,000 crore. The brokerage has factored in 3 orders which includes two orders from Aramco for setting up a gas processing plant and its main process units estimated at $2.9 billion ( ₹24,000 crore), while the second contract to construct gas compression units is worth $1 billion ( ₹8,300 crore), and Mega order from the Mumbai Metropolitan Region Development Authority (MMRDA) to design and construct an underground road tunnel.

The brokerage expects consolidated revenues to grow 18% YoY led by core and non-core business revenue growth of 22% and 9% YoY. It expects EBITDA margins to remain flat QoQ.

Going ahead, L&T’s management commentary on tender pipeline and status of non-core assets like Nabha power, metro ridership & financial assistance will be key monitorables.

The Hydrocarbon Business (L&T Energy Hydrocarbon – LTEH) of Larsen & Toubro (L&T) has secured Letter of Intent for yet another Ultra-Mega Onshore project from a prestigious client in the Middle East further to the recent Ultra-Mega project award for a Gas Compression plant.

L&T classifies Ultra-Mega orders as those worth more than ₹15,000 crore.

The scope of work comprises engineering, procurement, & construction for Gas Processing Plant consisting of Inlet Separation Facilities, Booster Compression System, Amine Gas Recovery Unit, Dehydration Unit, Mercury Removal Unit, NGL Recovery Unit and Sales Gas Compression System in new onshore facilities and its integration with existing Gas Processing Plants.

The Hydrocarbon Business (L&T Energy Hydrocarbon – LTEH) of Larsen & Toubro (L&T) has secured Letter of Intent for yet another Ultra-Mega Onshore project from a prestigious client in the Middle East further to the recent Ultra-Mega project award for a Gas Compression plant.

L&T classifies Ultra-Mega orders as those worth more than ₹15,000 crore.

The scope of work comprises engineering, procurement, & construction for Gas Processing Plant consisting of Inlet Separation Facilities, Booster Compression System, Amine Gas Recovery Unit, Dehydration Unit, Mercury Removal Unit, NGL Recovery Unit and Sales Gas Compression System in new onshore facilities and its integration with existing Gas Processing Plants.

Kotak Institutional Equities expects 24% YoY improvement in core EPC revenues of L&T as it bakes in improved construction activity across projects during the quarter. This implies 39% YoY growth for 1HFY24 for relevant government projects of L&T versus 40%+ YoY growth over 5MFY24 for the underlying aggregate capex for key customers (center, states, PSUs).

It expects core E&C business EBITDA margin at 8.5%, up by 40 bps YoY and expects the improvement in margin to be driven by lower commodity prices.

Prabhudas Lilladher expects L&T’s consolidated revenue growth of 17% YoY, led by growth in IT, Energy Projects, Hi-Tech Manufacturing and developmental projects. Strong tender pipeline from domestic as well as exports market is likely to drive order inflows.

“L&T is well-placed to benefit from overall diversified tender prospects with better order conversion in the domestic market, significant traction in capex from oil exporting countries, mainly hydrocarbon segment and expected uptick in private capex,\” Prabhudas Lilladher said.

It expects L&T to report revenue and PAT CAGR of 12.8% and 20.6% between FY23-FY25E. 

At the operational level, L&T’s earnings before interest, tax, depreciation, and amortization (EBITDA) during the quarter ended September 2023 is expected to rise 8.8% to ₹5,329 crore from ₹4,899.4 crore in the year-ago quarter.

However, EBITDA margin in Q2FY24 is likely to contract by around 96 basis points (bps) to 10.5% from 11.5%, YoY.

The capital goods companies are likely to report healthy performance in Q2FY24 owing to strong opening order books, continued execution momentum, favorable product mix and better orders from domestic as well as key export markets such as Middle East (ME), Americas, SAARC, Africa etc, analysts said.

L&T’s revenue in the quarter ended September 2023 is estimated to grow 18% YoY to ₹50,460 crore from ₹42,762.6 crore in the year-ago period.

During the July-September 2023 quarter, L&T announced orders in the range of ₹24,500 crore- ₹44,500 crore.

Engineering and construction behemoth L&T is expected to see 25% year-on-year (YoY) growth in its net profit for the quarter ended September 2023 to ₹2,786 crore, as per average analysts’ estimates. The company had reported a net profit of ₹2,228.9 crore in the same quarter last year. Its net profit in Q1FY24 was ₹2,493 crore.

L&T shares gave up early gains to trade lower. L&T share price opened higher at ₹2,949.75 apiece as compared to its previous close of ₹2,926.30 on the BSE. However, the stock gave up early gains and was trading marginally lower.

L&T shares were trading 0.15% lower at ₹2,921.95 apiece.

Engineering and construction behemoth Larsen & Toubro (L&T) is expected to see 25% year-on-year (YoY) growth in its net profit for the quarter ended September 2023 to ₹2,786 crore, as per average analysts’ estimates. The company had reported a net profit of ₹2,228.9 crore in the same quarter last year. Its net profit in Q1FY24 was ₹2,493 crore. Read full report here

Approximately 109 companies will release their September quarter results today. A handful of major companies that will be releasing their Q2 results, include Bharti Airtel Ltd, Adani Total Gas Ltd, DCB Bank Ltd, Indiabulls Real Estate Ltd, Indian Oil Corporation Ltd, Jindal Steel & Power Ltd, Larsen & Toubro Ltd, Reliance Power Ltd, Tata Consumer Products Ltd, and Zee Media Corporation Ltd. Read here

L&T is expected to report strong net profit and sales growth on the back of robust IT, Energy Projects, Hi-Tech Manufacturing and developmental projects. Strong tender pipeline from domestic as well as exports market is likely to drive order inflows, analysts said.

Larsen & Toubro (L&T), the engineering and construction conglomerate, will today announce its financial results for the second quarter of FY24.