Strong execution in the mainstay infrastructure segment, healthy order inflows, and lower input costs are likely to drive a robust double-digit growth in the December quarter earnings of engineering behemoth Larsen & Toubro.

The company is seen reporting a 39% year-on-year (YoY) growth in consolidated net profit for the quarter to Rs 3,362 crore, according to the average of estimates given by seven brokerages.

This growth will be led by a 17% increase in the consolidated revenue to Rs 54,255 crore and a 21% rise in operating profit to Rs 6,137 crore.

The engineering major is scheduled to release its third-quarter earnings on Tuesday.

Analysts expect order inflows to be robust at around Rs 610-650 billion and working capital to improve due to receipt of customer advances on large international orders secured in the first half of the current financial year.

In the six months ended September, L&T bagged orders worth Rs 1.55 lakh crore, up 65% YoY, of which, international orders stood at Rs 87,333 crore.

Given the strong momentum in order inflows, some analysts expect L&T to raise its revenue growth and order inflow guidance for FY24.Here’s summarising analysts’ expectations on the earnings of the infrastructure major.


We anticipate Rs 650 billion in new orders this quarter, with core revenue projected to grow by 21% and non-core by 10% YoY. The ongoing execution of legacy projects, along with new hi-tech manufacturing jobs reaching only at 40% margin threshold, may continue to impact margins.

BNP Paribas

We estimate core sales at Rs 384 billion (+23% YoY) and core margins to recover to 8.6% (flattish YoY; up 120 bps QoQ), as older legacy fixed-price contracts are nearing completion. Further, we estimate order inflows to be robust at Rs 610 billion (Flat YoY) and working capital to improve from 17% in H1 of FY24, due to receipt of customer advances on large international orders secured in the period.

We estimate core (ex-services) EBITDA margins to improve sequentially, driven by reduced contribution from legacy fixed price contracts, which management expects to complete by Q4 of FY24. We further expect net working capital to sales (ex-finance) to moderate, potentially driven by the receipt of customer advances from large international projects secured in H1 FY24.

Kotak Institutional Equities

We expect 17% YoY improvement in core EPC revenues as we bake in improved construction activity across projects during the quarter. This implies 31% YoY growth for 9M FY24 for relevant government projects of L&T versus similar YTD quantum for growth in capex for the centre.

We expect core E&C business EBITDA margins of 8.6%, up by 10 bps YoY. We expect the improvement in margin to be driven by lower commodity prices.

JM Financial

We expect L&T’s P&M (Projects and Manufacturing) order inflows to grow by 9.3% YoY on a strong base to Rs 500 billion, led by robust wins in hydrocarbons. Consolidated inflows are likely to grow by 9.5% YoY to Rs 665 billion.

We expect 18%/20% YoY growth in P&M revenue/ EBITDA with P&M margins expanding 130 bps QoQ to 8.7% (+20 bps YoY).

Consolidated revenue is likely to grow 15% YoY to Rs 533 billion, and EBITDA 19% to Rs 60 billion, with EBITDA margin at 11.3% (+40 bps YoY/+30 bps QoQ).

We expect adjusted PAT to grow sharply by 30% YoY to Rs 31.3 billion, aided by operating leverage. On reported basis, PAT growth would be 23% YoY as the base year included net gain of Rs 1.36 billion on sale of MF business.

Centrum Broking

We are building in 13% YoY growth in revenue for L&T, with consolidated EBITDA margins of 11.3%, up 41 bps YoY and 31 bps QoQ.

For the core EPC business, we are building in 21% YoY growth in revenue and margins of 8.6%. We expect infrastructure margins to improve going further, as COVID legacy projects are nearing completion.

PAT is expected to increase by 35% YoY to Rs 32.7 billion. L&T has kept its order win momentum ticking this fiscal, with inflow amounting to Rs 230 billion in 3QFY24. Order inflow for the company has been robust, and we expect the management to increase its revenue and order inflow guidance upwards for FY24.

Prabhudas Lilladher

We expect L&T to report consolidated revenue growth of 19.4% YoY, led by growth in infrastructure projects, HiTech manufacturing and development projects. EBITDA margin is likely to increase by 45 bps to 11.4%, owing to continued profitability improvement in development projects and better margins in energy, IT and financial services segments.

During the quarter, L&T announced robust order intake in the range of Rs 535-820 billion, driven by a couple of large hydrocarbon projects in the Middle East.

Management commentary on tender prospects and status of Development Projects will be key monitorables.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


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