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ICICI Direct Report
Larsen & Toubro Ltd. adjusted standalone revenues (ex-Electrical and Automation business) for the first quarter degrew 50.6% YoY to Rs 8150 crore, below our estimate of Rs 8865.7 crore. On a standalone basis, infrastructure segment reported a subdued performance with revenue decline of 53.8% YoY to Rs 6040.2 crore. Heavy engineering segment revenue de-grew 57.1% YoY to Rs 425.1 crore. On the other hand, power segment revenues continued to decline 32.5% to Rs 380 crore, defence engineering segment revenues de-grew 49.3% to Rs 476.5 crore.
Consequently, for Q1 FY21, standalone adjusted profit after tax came in at Rs 306.6 crore, which de-grew 65.6% YoY (below our estimate of Rs 323.6 crore) aided by lower raw material cost and higher other income. On a consolidated basis, adjusted revenues from continuing operations on a like-to-like basis declined 31.4% to Rs 21260 crore on a YoY basis.
L&T reported reasonable order inflows while execution challenges remains amid Covid-19, which could have some impact in the near term. Also, preservation of working capital to be closely monitored to provide comfort on the balance sheet front. We expect it to deliver standalone revenue compound annual growth rate (CAGR) of 1.2% and Ebitda CAGR of 4.3% over FY20-22E.
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