About the company:
Larsen & Toubro (L&T) is one of India’s largest multinational conglomerates, headquartered in Mumbai. Established in 1938, L&T operates in diverse sectors, including engineering, construction, infrastructure, technology, defense, and financial services. It is a key player in urban development, power, hydrocarbons, and heavy engineering projects globally. L&T is known for its strong execution capabilities, technological innovation, and sustainability initiatives. The company is listed on the BSE and NSE and plays a crucial role in India’s infrastructure and industrial development.
Business Segment Performance:
Infrastructure:
Orders: ₹491 billion, up 14% YoY (74% international).
Revenue: ₹321 billion, up 15% YoY.
EBITDA Margin: 5.5% (flat YoY).
Energy (Hydrocarbon & CarbonLite Solutions):
Orders: Strong pipeline of ₹1.44 trillion.
Revenue: ₹111 billion, up 41% YoY.
EBITDA Margin: 8.3% (down from 9.7%) due to project execution stages.
Hi-Tech Manufacturing (Precision & Heavy Engineering):
Orders: ₹418 billion order book.
Revenue: Continued growth in Precision Engineering; muted in Heavy Engineering.
IT & Technology Services:
Revenue: ₹121 billion, up 8% YoY.
Lower margins due to wage hikes and forex losses.
L&T Finance:
Achieved 97% retailization.
Expected normalization in microfinance credit costs from Q1 FY26.
Development Projects:
Hyderabad Metro: Daily ridership at 4.45 lakh passengers.
Metro posted a lower loss of ₹2.03 billion (vs. ₹2.54 billion in Q3 FY24) due to debt reduction.
Others (Realty, Machinery, Valves):
Realty pre-sales: ₹2,500 crore (9M FY25).
Industrial Machinery & Products saw margin improvement.
Future Outlook & Guidance:
Order Inflows: Expected to surpass 10% guidance for FY25.
Revenue Growth: Expected to exceed 15% guidance for FY25.
EBITDA Margin (P&M segment): 8.2% target for FY25.
Net Working Capital: Expected to stay at 12.7% of revenue in March 2025.
New Growth Areas: Continued investments in green energy, data centers, semiconductors.
| Metric | Q3 FY25 | Q2 FY25 | Q1 FY25 |
|---|---|---|---|
| Revenue | ₹647 billion | ₹544 billion | ₹578 billion |
| Order Inflows | ₹1,160 billion | ₹798 billion | ₹712 billion |
| Order Book | ₹5.64 trillion | ₹4.86 trillion | ₹4.73 trillion |
| EBITDA Margin | 9.7% | 10.4% | 10.3% |
| PAT (Net Profit) | ₹33.6 billion | ₹29.1 billion | ₹27.3 billion |
| Net Working Capital | 12.7% of revenue | 13.5% of revenue | 14.2% of revenue |
| ROE | 16.1% | 15.5% | 15.0% |
Recent updates:
Highlights from last con call:
Financial Performance:
Revenue: ₹647 billion in Q3 FY25, up 17% YoY.
EBITDA Margin: 9.7% (vs. 10.4% in Q3 FY24) due to revenue mix and lower IT segment margins.
Order Book: ₹5.64 trillion as of December 2024, up 20% YoY (Domestic: 58%, International: 42%).
PAT: ₹33.6 billion, up 14% YoY.
Working Capital: Improved significantly, with Net Working Capital to revenue at 12.7% (vs. 16.6% in Dec ’23).
ROE: 16.1%, up 90 bps YoY.