L&T Q4 Results: Profit Up 12%, Beats Estimates

Larsen and Toubro Ltd.'s fourth-quarter profit rose, beating analysts' estimates on better project execution across segments.

Net profit of India's largest engineering-to-construction company increased 12.4% year-on-year to Rs 5,013 crore in the three months ended March, according to an exchange filing. This compares with the Rs 4,017.63-crore consensus estimate of analysts tracked by Bloomberg.

The earnings were largely driven by strong performance across the infrastructure and energy segments.

L&T Q4 FY24 Highlights (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 at 10.8% versus 11.7%.

• Net profit rose 12.4% to Rs 5,013 crore (Bloomberg estimate: Rs 4,017.63 crore).

Total orders received during the quarter declined 5% YoY to Rs 72,150 crore. International orders constituted 35% of the total order inflow, while domestic orders constituted the rest and grew at 17% YoY.

For FY24, total orders saw robust growth of 31% YoY to Rs 302,812 crore. During the year, orders were received across multiple segments like onshore and offshore verticals in hydrocarbon, metros, urban transit systems, airports, roads and bridges, residential, renewables, transmission and distribution and the precision engineering sectors.

International orders constituted around 54% at Rs 1,63,112 crore of the total order inflows during the year. Higher ordering momentum was witnessed in GCC countries, the company said in a statement.

"We are confident that our new-age businesses such as green energy, semiconductor chip design, digital platforms and data centers will harness the power of technology and complement the growth of our traditional core businesses in accelerating our strides towards our perspective plan targets," SN Subrahmanyan, chairman and managing director, said.

The company believes that despite the ongoing geopolitical turmoil globally, the growth story of India will continue, he said. "We, as a company, are proud to be an integral part of this change. The tailwinds of India's economic growth will continue due to the impact of structural reforms, strengthening physical and digital infrastructure, improving institutional strength and strong governance," Subrahmanyan said.

L&T Guides For Revenue, Order Growth In FY25

The company has guided for 15% revenue growth for FY25 and 10% growth in order inflows—which is lower as compared with 21% and 20%, respectively, guided in FY24—as the union election is likely to impact the first two quarters of fiscal 2025.

R Shankar Raman, chief financial officer of L&T, told media in a conference call that execution of projects is likely to be impacted by elections. Also, labour mobilised at construction sites have already gone to their villages from the site locations, and are unlikely to return immediately after casting their votes, which would have an impact on projects, he said.

By the time they will return, monsoon will begin, so two quarters are lost before things would start to pick up, he said.

"As far as margins are concerned, they progress on jobs and speculations on logistics and energy costs and their competitiveness, given the energy transition that is going on. Given the revenue guidance of 15%, margins are likely to remain in the current range of 8.25-8.5% in FY25," Raman said.