L&T’s net profit soars 45% in Q2 to ₹3,223 crore
L&T reported a 45% growth in consolidated net profit to ₹3,223 crore in the September quarter, driven by improved order book execution. Operating revenue was ₹51,024 crore, up 19% from a year earlier. The company received orders worth ₹89,153 crore, a growth of 72% from a year earlier.
New Delhi: Construction and engineering behemoth Larsen & Toubro (L&T) reported 45% growth in its consolidated net profit to ₹3,223 crore in the September quarter, driven by improved order book execution.
In an exchange filing on Tuesday, the company reported an operating revenue of ₹51,024 crore in Q2FY24, up 19% from a year earlier. Its earnings before interest, taxes, depreciation, and amortization for the quarter stood at ₹5,632 crore, with an 11% ebitda margin. The company received orders worth ₹ 89,153 crore at the group level in the quarter, registering a robust growth of 72% from a year earlier.
“All our businesses—projects, manufacturing and services—have grown. During the quarter, we received the highest-ever order inflows in our history. This shows the faith our customers place on us and is a reflection of our capability to perform and deliver projects on time. The company now tops the list of international EPC (engineering, procurement and construction) contractors working in the Middle East-North Africa (MENA) region in terms of value for projects under execution,” S.N. Subrahmanyan, the chairman and managing director of L&T, said.
During the quarter, orders were received for diverse segments including onshore verticals of its hydrocarbon business, urban transit systems, transmission and distribution, as well as residential and commercial. International orders were at ₹59,687 crore for the quarter comprising 67% of the total order inflow, L&T said.
On a cumulative basis, order inflow for the half-year ended 30 September 2023 was at ₹154,672 crore, registering growth of 65% over the corresponding period of the previous year. International orders at ₹87,333 crore during the half-year contributed 56% to it. On a half-yearly basis, domestic orders grew 15% y-o-y. Its consolidated order book as of 30 September, was at ₹450,734 crore, with international orders having a share of 35%.
Its infrastructure business posted a revenue of ₹24,613 crore in the quarter, up 27% from a year ago aided by improved execution across project sites. The energy segment posted 22% revenue growth to ₹6,788 crore in Q2, on the back of a pickup in execution momentum for a few international hydrocarbon projects.
While its hi-tech manufacturing segment posted ₹1,886 crore in the quarter, recording 30% y-o-y rise, financial services recorded 2% fall in operating income to ₹3,084 crore during the period. The IT and technology services (IT&TS) segment posted revenue of ₹11,182 crore during Q2 FY24, registering 7% y-o-y growth and its development projects segment recorded customer revenues of ₹1,849 crore, registering a healthy 38% growth, driven by the monetization of commercial property at Hyderabad Metro. Others segment revenues during the quarter, at ₹1,622 crore, registered 14% growth from a year earlier, contributed by higher handover of residential flats in the realty business.
Analysts said the growth in L&T’s order book indicated strong momentum in the infrastructure sectors despite five assembly polls and general elections next year.
“Given that overall infrastructure and buoyancy remain strong with a healthy order book and execution of the industry, the revenue booking will remain strong going forward. We believe all sub-segments—road, water, railways, metro, etc., will reap benefits from this,” Ashish Modani, the vice-president and co-group head of corporate ratings, Icra Ltd, said.
“Considering the general elections next year, and ongoing conflict in the Middle East, we believe the construction sector to grow at 12-15% with improvement in the margins. This double-digit growth is dependent on the fact that the government policies and capital outlay both at the Centre and State level continue to remain strong,” he added.
The company added that the war between Israel and Hamas in the Middle East may not impact them much since a large number of their projects are in Saudi Arabia.
“The war in the Middle East is an unfortunate development, our most of the orders in the Middle East are from Saudi Arabia, which, as we speak now seems to have steered clear from entering the conflict or conflicting situation, and given the quality of programmes that they have unleashed and that we have participated in, it is unlikely in our assessment today, that the current Israel conflict is going to derail the programme...So, we are not losing any sleep over it.”
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First Published:31 Oct 2023, 06:55 PM IST
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