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  • 27 Jul 2022
  • ICICIdirect Research

STRONG SHOW ACROSS BOARD

LTTS - 5431 Change: -22.15 (-0.41 %)

News: L&T’s adj. standalone revenues (Ex- E&A) for the quarter grew by 21.7% YoY to Rs 20211.7 crore (vs. our estimate of Rs 20586.7 crore). On a consolidated basis, adj. revenues grew by 22% to Rs 35853 crore YoY basis with strong execution witnessed in the Infrastructure segment and riding on the sustaining growth momentum in the IT&TS portfolio. For Q1FY23, L&T registered strong order inflows at group level worth Rs 41805 crore, which grew by 57% YoY. International orders for Q1FY23 came in at Rs 17842 crore contributing 43% to order inflows. L&T’s order backlog as on Q1FY23 stood at Rs 363448 crore with international orders contributing 28%. During the quarter, Standalone EBITDA margins declined by 68bps to 7.6% (Vs. our estimates of 7.7%) on YoY basis owing to job mix and cost control initiatives. On a consolidated basis, EBITDA margins came in at 11%. Consequently, for Q1FY23, standalone Adj. PAT (Ex-E&A) came in at Rs 911.2 crore, de-grew by 9.7% on YoY (Vs. our estimates of Rs 1392.9 crore) due to lower other income. Other income came in at Rs 567.9 crore de-grew by 19.5% on YoY while, interest expense increased by 6.3% to Rs 504.5 crore. The consolidated adj. PAT for Q1FY23 came in at Rs 1702.07 crore (Vs Rs 1174.4 crore in Q1FY22).

Views: L&T reported strong execution with equally strong order inflows for the quarter. L&T is well on track to achieve its guidance of 12-15% revenues and order inflow growth for FY23E. The margins guidance has been pegged at 9.5% given the volatile commodity outlook. Focus on monetisation of non-core assets, enhancing ROE’s and reducing debt makes it an attractive portfolio bet to ride the infrastructure and manufacturing cycle revival theme.

Impact: Positive.