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Larsen & Toubro Ltd.’s profit in the third quarter increased thanks to strong order intake 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 analyst consensus estimate tracked by Bloomberg of Rs 3,245.7 crore.
L&T Q3FY24 Highlights (Consolidated YoY)
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Revenue from operations rose 18.83% to Rs 55,127.8 crore (Bloomberg estimate: Rs 53,571 crore).
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Ebitda, or operating profit, rose 13.52% to Rs 5,759 crore (Bloomberg estimate: Rs 5,984.7 crore).
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The Ebitda margin fell 48 basis points to 10.44% compared to 10.93 a year ago (Bloomberg estimate: 11.2%).
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Net profit rose 17.24% to Rs 3,594.51 crore (Bloomberg estimate: Rs 3,245.7 crore).
Order intake in the third quarter rose 25% year-on-year to Rs 75.99 billion at the group level. Orders flowed across various business segments such as the offshore hydrocarbon vertical, solar and power transmission EPC business, water services, buildings and factories, and minerals and metals segments.
International orders constituted 67% of the total order intake during the quarter at Rs 50,562 crore.
Order intake during April-December 2023 rose 49% year-on-year to Rs 2,30,662 crore. International orders worth Rs 1,37,894 crore constituted 60% of the total intake during the period.
The consolidated order book stood at Rs 4,69,807 crore as on December 31, 2023, with international orders accounting for a 39% share.
The company has revised its order intake guidance for FY24 from 10-12% upwards to 20%, given the strong visibility of order intake from domestic and international projects, said R Shankar Raman, whole director and director. L&T Financial.
The company also expects to beat revenue guidance of 12-15%. “We see income targeting among teenagers,” Raman said.
The disruption of the supply chain in the Red Sea channel is a cause for concern as it is an important channel for logistics, Raman said. “We have started work on new routes and there will be discussions about additional costs and their compensation.”
However, growth momentum in the region continues as Middle Eastern countries now focus on investments to achieve decarbonization goals, he said.
L&T had emerged as the largest EPC player in the Middle East and MENA region in the previous quarter, with several of its big projects coming from that region.
However, these projects take time before reaching the execution stage. Therefore, these projects have no impact today, he said.
L&T shares closed down 2.02% on the BSE, against a fall of 1.11% in the benchmark Sensex.