- 01 Nov 2022
- ICICIdirect Research
L&T MANAGEMENT OPTIMISTIC ON MEETING 15% GROWTH GUIDANCE FOR REVENUE, ORDER INFLOW IN FY23
LT - 3695 Change: 32.95 (0.90 %)News:
Larsen & Toubro (L&T) reported strong execution with decent order inflows for Q2FY23. L&T’s adjusted standalone revenues (ex- E&A) for the quarter grew 21.1% YoY to Rs 25769.8 crore (vs. our estimate of Rs 23205.6 crore). On a consolidated basis, adjusted revenues grew 23% to Rs 42763 crore YoY with execution tailwinds in the infrastructure projects segment and sustained growth momentum in the IT&TS portfolio. Standalone EBITDA was up 12.1% YoY to Rs 1907.6 crore. Margins declined 59 bps to 7.4% (vs. our estimates of 8.3%) on a YoY basis. On a consolidated basis, EBITDA margins came in at 11.4%. Consequently, for Q2FY23, standalone adjusted PAT (ex-E&A) came in at Rs 2109.5 crore, down 1.7% YoY (vs. our estimate of Rs 1859 crore). Other income came in at Rs 1554.2 crore, up 21.4% YoY while interest expense increased 36.4% to Rs 578.6 crore. Consolidated adjusted PAT for Q2FY23 came in at Rs 2229 crore (vs. Rs 1819.4 crore in Q2FY22). For Q2FY23, L&T registered strong order inflows at group level worth Rs 51914 crore, up 23% YoY. International orders for Q2FY23 were at Rs 17,341 crore comprised 33% of total order inflow. Overall infrastructure segment secured orders worth Rs 25058 crore (~48.2% of total inflows). L&T’s order backlog as on Q2FY23 was at Rs 372381 crore with international orders contributing 28%
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L&T is optimistic about meeting its 15% growth guidance for revenue and order inflow in FY23. However, margins guidance has been pegged at 9.5% owing to a mix of fixed price contracts and variable price contracts. Focus on monetisation of non-core assets, improving RoEs and reducing debt make it an attractive portfolio bet to ride the infrastructure and manufacturing cycle revival theme
Impact:
Positive