L&T, Asian Paints, Titan, Bharat Forge, Voltas, Route Mobile, Symphony, Aarti Industries Q4 Results Review

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HDFC Securities Institutional Equities

Larsen & Toubro - Slight quarterly miss; strong FY26 guidance

Larsen & Toubro Ltd. reported revenue/Ebitda/adjusted profit after tax at Rs 743.9/82/50.2 billion, a beat/(miss) of (5.2)/(4.3)/3.3%, aided by lower finance cost/tax. P&M margins stood at 9.9% (+30bps YoY). L&T guided for 10% order inflow growth (vs flat expectation) on a high FY25 base and 15% revenue growth (in-line) with P&M margin guidance for FY26 at 8.5%. Net working capital to sales improved 100bps YoY to 11% and L&T guided for FY26 at 12%. Adjusted for delay in water payments, NWC stood at 8-9%. Given the high share of export order inflows in the mix (58% for FY25), L&T expects FY26 execution to have an increasing proportion of lower margin fixed-price contracts (46% the order book, baked into its margin guidance).

Material margin expansion is expected from FY27E when the hydrocarbon project mix increases (Rs 1.4 trillion order book – 24% share). The company guided that margin re-rating will be led by a ramp-up in execution. We marginally cut estimates to factor in lower margins in exports orders. Given -

1. the record-high order book of Rs 5.8 trillion,

2. the likely bottoming out of infrastructure margins,

3. improvements in subsidiary performance, and

4. higher public capex towards a green economy, we maintain our Buy stance with an SOTP-based target price of Rs 4,215 per share (29x Mar-27E EPS).

Titan - Jewellery margins surprise positively

Consolidated jewellery sales (ex-bullion) grew 24.9% YoY to Rs 122.7 billion (in-line; our estimate: Rs 122.9 billion) buoyed by ticket size growth. Domestic jewellery (ex-bullion) grew 23.4% YoY. (Consolidated topline growth stood at 19.4% YoY at Rs 149.2 billion; our estimate: 151.5 billion). Elevated gold prices continued to impact product mix (Studded ratio down 300 bps YoY at 30%). Despite the inferior mix, Jewellery Ebitm (consolidated) contracted by a mere 24bps to 10.9% (our estimate: 10%) due to-

1. Superior international biz’ margins,

2. better overhead management, and

3. marginal hedging gains.

Watches & Eyewear delivered healthy growth (+18% YoY). We marginally increase our FY27 EPS estimates by 2% and maintain our Reduce rating with a DCF-based target price of Rs 3,200/share (implying 50x FY27 P/E).

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