L&T Q3 net profit rises 24% to ₹2,553 cr, revenue grows 17%
3 min read . Updated: 31 Jan 2023, 12:26 AM IST
PremiumLarsen and Toubro Ltd’s consolidated net profit was up 24% from a year ago to ₹2,553 crore in the third quarter of 2022-23
Larsen and Toubro Ltd’s consolidated net profit was up 24% from a year ago to ₹2,553 crore in the third quarter of 2022-23. Even after adjusting for one-offs, recurring net profit stood at ₹2,456 crore, growing 20% compared to a net profit of ₹2,055 crore in the year ago.
One-offs included exceptional gain of ₹97 crore following the divestment of mutual fund business which was however off-set by onetime charges due to the remeasurement of the wholesale loan assets of the financial services segment.
With the conclusion of sale of the mutual funds arm and a phased rundown of the wholesale loan book, its financial services business will continue to grow in line with the strategy of “retailization of the loan book", said S. N. Subrahmanyan, chief executive officer and managing director, L&T Ltd. We reported strong all-round results for the quarter, he added.
L&T reported 17% growth in consolidated revenue from the year ago to ₹46,390 crore during Q3, aided by better execution of infrastructure projects and growth momentum in IT and technology services portfolio, the company said.
International revenues for the quarter constituted 37% of total revenue at ₹17,317 crore.
However, it saw some pressure on margins. On costs, its infrastructure portfolio was hit by rising input costs. Its Ebitda margins in Q3 at 7% and for the first nine months at 6.5%, were lower than the 7.1% and 6.7% in the year ago. Margins for the services business also declined with rising wage costs due to an increase in manpower.
Earnings before interest tax depreciation and amortization (Ebitda) at ₹5,070 crore, as per analyst calculations, was up by 12% from a year ago, while margin fell 52 basis points to 10.9%.
Its order flows were robust at ₹60,710 crore at the group level during the quarter registered 21% growth from a year ago, driven by new order wins across oil and gas, public spaces, hydel and tunnels, irrigation systems, ferrous metals as well as power transmission and distribution.
Domestic orders contributed 75% to the order flows while International orders at Rs15,294 Crore comprised 25% of the total order inflow.
The Infrastructure Projects Segment continues to lead in terms of the order flows securing order inflows worth ₹32,530 crore, a significant growth of 28% y-o-y during Q3. The International orders at ₹ 2,936 crore constituted 9%
The Hydrocarbons segment remains the next key order flow driver. Energy Projects segment secured orders valued at ₹ 9,051 crore during Q3 , registering a growth of 12% y-o-y on receipt of a large domestic offshore oil & gas order in the Hydrocarbon business. International order inflow constituted 14% of the segment order inflow.
On a cumulative basis, company has received order flows worth ₹154,429 crore, registering a growth of 30% y-o-y , during first nine months of FY23.
The consolidated order book of the group thereby stands ₹386,588 crore at the end of Q3 with international orders having a share of 26%.
While the Hydrocarbon order flows remain strong, the Energy business slower order inflows are due to lower orders from the Thermal power Sector. Shankar Raman CFO of the company however highlighted that private sector orders are on the rise. With Q4 likely to be the strongest quarter, The foruth quarter performance and order inflows are likely to remain strong.
S. N. Subrahmanyan, Chief Executive Officer & Managing Director, Larsen & Toubro Limited said that “ We are possibly amidst a synchronous Capex recovery in India & the GCC. With the revival of private capex investments, India should witness a multi-year Capex cycle in the current decade, which augurs well for us. We continue to pursue our stated objective of value-added growth in the Projects & Services business and deliver greater value to all our stakeholders."
The company has reported healthy growth for revenue and order inflow, while margin impacted due to higher employee cost, said Arafat Saiyed, analyst at Reliance Securities An expected healthy pick-up in ordering activities and a sharp improvement in order inflow may drive the stock’s performance in the medium-to-long-term said Arafat.
