Workmen build an oil platform at the Larsen and Toubro Ltd yard in Hajira, India. (Photographer: Santosh Verma/Bloomberg News)  

Q4 Results: L&T Projects 12-15% Revenue Growth In FY19

Larsen & Toubro Ltd.’s profit rose for the ninth straight quarter, and its operational performance surpassed analysts’ estimates.

Net profit stood at Rs 3,167 crore during January-March period, an increase of 5 percent from the year-ago period, India’s largest construction, and engineering company said in a stock exchange notification. That compares with the Rs 2,995-crore consensus estimate of analysts tracked by Bloomberg.

Revenue rose 11 percent to Rs 40,678 crore in line with the estimated Rs 41,068 crore led by infrastructure, hydrocarbons and heavy engineering segments. The company missed its revenue projection for the financial year 2017-18 but surpassed the order inflow guidance. The company’s order intake rose 5 percent to Rs 49,560 crore. The global order inflow, which contributed 18 percent of the total order flow, stood at Rs 8,678 crore.

“We expect about 30-32 percent international orders during 2018-19. We also plan to exit some subscale businesses even if they are profitable,” L&T’s Whole-Time Director and Chief Financial Officer Shankar Raman told reporters in an earnings press conference today.

Q4 Results: L&T Projects 12-15% Revenue Growth In FY19

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The company expects a 12-15 percent increase in revenue and 10-12 percent increase in order inflows in the current financial year, Raman said. Margins are likely to remain stable with an upward bias of 25 basis points, he added.

“The company is depending more on government and the public sector in terms of order inflow,” Raman said, adding that the private sector will take another two years to stabilise.

The order inflow in 2018-19 will be similar to the previous financial year where 70 percent or the order will be contributed from government or PSUs and the remaining 30 percent from the private sector.
Shankar Raman, Whole-Time Director & CFO, L&T

L&T's operational performance surpassed estimates. Earnings before interest, tax, depreciation, and amortisation rose 23 percent to Rs 5,390 crore compared to the Rs 5,011 crore-estimate, while operating margins expanded to 13.2 percent from 11.9 percent earlier, and surpassing the 12.2 percent estimate.

Segment Wise Performance

  • Revenue from infrastructure segment rose 12 percent year-on-year to Rs 23,135.97 crore.
  • Revenue from power segment fell 11 percent year-on-year to Rs 1,506.76 crore.
  • Revenue from heavy engineering segment rose 22 percent year-on-year to Rs 1,183.46 crore.
  • Revenue from electrical and automation segment rose 5 percent year-on-year to Rs 1,643.06 crore.
  • Revenue from hydrocarbon segment rose 22 percent year-on-year to Rs 3,559.07 crore.
  • Revenue from information technology segment rose 15 percent year-on-year to Rs 3,152.35 crore.
  • Revenue from financial services segment rose 18 percent year-on-year to Rs 2,722.08 crore.
  • Revenue from developmental projects segment rose 7 percent year-on-year to Rs 1,216.98 crore.
  • Revenue from others fell 19 percent year-on-year to Rs 3,151.59 crore.

Shares of L&T closed 2.6 percent higher at Rs 1,376.45 apiece ahead of the results announcement. The stock returned 4.2 percent between January and March, compared to 3.9 percent decline in the benchmark NSE Nifty 50 Index during the period.