Larsen & Toubro (L&T) announced impressive financial results for the second quarter of the fiscal year 2023-24, with a significant increase in net profit and revenue.
Net Profit and Revenue Growth
The company’s net profit for Q2 FY24 surged by 45% to ₹3,223 crore, compared to ₹2,229 crore in the same quarter last year. Similarly, its revenue from operations saw a robust growth of 19%, reaching ₹51,024 crore in Q2 FY24 from ₹42,763 crore in Q2 FY23.
Record Quarterly Order Inflow
L&T also achieved its highest-ever quarterly order inflow in Q2, totaling ₹89,153 crore across various segments, marking an impressive 72% year-on-year growth.
Positive Outlook and Performance Expectations
S N Subrahmanyan, CMD of L&T, expressed confidence in the company’s performance, stating, “During the quarter, we have received the highest ever order inflows in the history of the company.” He further mentioned that L&T now leads among international EPC contractors in the MENA region in terms of project value.
Outlook for FY24
R Shankar Raman, CFO of L&T, shared an optimistic outlook for the next 6-12 months, indicating a likelihood of outperforming the order inflow and revenue guidance set for FY24. The company had initially guided for a 10-12% growth in order intake and a revenue growth of 12-15% for FY24.
Order Book and International Presence
As of September 30, 2023, L&T’s consolidated order book stands at ₹4.5 lakh crore, with international orders accounting for 35%. The company’s success in securing orders is particularly notable in the Middle East, notably Saudi Arabia, where a significant portion of Q2’s order inflows originated.
Impact of External Factors
Regarding the ongoing conflict between Israel and Hamas, L&T stated that it does not anticipate significant disruptions to its projects. The company highlighted progress in overcoming supply chain constraints post-Covid and expressed confidence in managing potential risks.
Margins and Future Expectations
While L&T’s EBIDTA grew by 15% for the quarter, there was a slight decrease in EBIDTA margins from 11.4% to 11%. This margin adjustment was attributed to input cost rises related to pre-Covid legacy contracts in the infrastructure segment. However, the company expects margins to normalize in subsequent quarters as these projects near completion.
Ben Müller
