 "L&T Q1FY25 results: Net profit rises 11.7% to Rs 2,786 cr on higher revenue")
Engineering conglomerate Larsen & Toubro’s (L&T’s) net profit for the June quarter (Q1FY25) has risen 11.7 per cent, aided by higher revenue and better order execution.
For the quarter, L&T reported consolidated net profit of Rs 2,786 crore.
Revenue for the period rose 15.1 per cent to Rs 55,210 crore on a year-on-year (Y-o-Y) basis.
For FY25, the company’s management had earlier guided for 15 per cent growth in revenue and a 10 per cent increase in order inflow from a year ago, and core margins were expected to remain at 8.25 per cent.
The management on Tuesday said the guidance stayed.
The outstanding order book as of June 2024, the company said, was at Rs 4.90 trillion, with the international share at 38 per cent.
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New order wins were worth Rs 70,936 crore, up 8 per cent Y-o-Y, which, the management said, was aided by contracts abroad, particularly West Asia.
“International orders amounted to Rs 32,598 crore, making up 46 per cent of the total order inflow,” the company said.
The management added Y-o-Y growth in domestic orders was muted at 1 per cent, which was expected owing to the Lok Sabha elections.
The company beat Street estimates. In a Bloomberg poll, 13 analysts had estimated revenue of Rs 53,600 crore and seven analysts estimated a net income adjusted of Rs 2,639 crore.
Sequentially, L&T’s profit fell 36.6 per cent and revenue was down 17.8 per cent.
S N Subrahmanyan, chairman and managing director, said: “We have achieved steady growth on all financial parameters in Q1FY25, despite the geopolitical situation across the globe. The Union Budget has presented a detailed road map towards a Viksit Bharat by 2047. With the expected policy continuance in India, the tailwinds in Indian economic growth are likely to continue, which will help the group to achieve its Lakshya 26 targets.”
R Shankar Raman, chief financial officer and whole-time director of the company, said L&T would re-brand and re-purpose its power business segment as carbon-lite, to take opportunities in energy transition, including carbon capture.
On the company’s tripartite venture with Renew and Indian Oil Corporation (IOC), being one of the bidders for a green hydrogen project from IOC, Raman added: “My assessment is there is no ground for re-tendering (referring to the poor participation in the bidding process, which was a second attempt at tendering).”
Commenting on growth in private capital expenditure, Raman added: “It will be measured and will not happen in a burst. It will not come in a rush as seen in public-private participation earlier.”
L&T in its press statement, commenting on the general election results, noted: “With the Union elections behind and the likely political stability, the government’s continued thrust on capex and business optimism augur well for investment activity. However, the pace of infrastructure progress could slow due to skilled labour shortage in certain sectors.”
Raman expects an order pipeline of Rs 9 trillion, and 60 per cent of these potential orders are in the domestic market.
Speaking on the Rs 11.11 trillion capital outlay announced in the Budget on Tuesday, he said: “Rather than disappointment that it was not revised upwards from the Interim Budget, there is relief that it has not been reduced … There seems to be a ‘let investment happen and consumption will grow’ approach.”