Larsen & Toubro Q4 results today: Here’s what analysts expect from financials to order in flows

  • Stock Market Today: Larsen and Toubro (L&T) share price remained volatile ahead of Q4 results today. The strong order book is likely to support revenue growth. Here is what analysts say on margins, order in flows and key monitorable to be watched for during Q4

Ujjval Jauhari
Published8 May 2024, 01:47 PM IST
Larsen & Toubro share price volatile ahead of  Q4 results today: Here's what analysts expect
Larsen & Toubro share price volatile ahead of Q4 results today: Here’s what analysts expect

Stock Market Today: Larsen & Toubro Ltd ( L&T)share price that opened almost flat on Wednesday, however remained volatile thereafter. While Larsen & Toubro share price gained slightly more than 1% on the upper side, Larsen & Toubro share price also corrected more than 1% in morning trades indicating nervousness ahead of Q4 results.

Larsen & Toubro share price has remained the favorite of investors as strong economic growth in the country is likely to drive earnings growth of behemoths as Larsen & Toubro. 

Larsen & Toubro share price had seen sharp rally to 52- week highs in April after Larsen & Toubro reported a decent Q3 performance with strong order flows that improved the forward revenue visibility.

It is the execution that will remain watched for in Q4.  as March is likely to see weak activities ahead of general elections, festive season and so on,  though January and February are expected to see good execution.

Also Read- Dr Reddy's share price falls 5% post Q4 earnings performance: Should you Buy, Hold or Sell the stock?

Revenues expected to see good growth

Analysts at Kotak Institutional Equities expect 18% yoy improvement in core EPC (Engineering, procurement, and construction) revenues as they bake in improved construction activity across projects during the first two months  of Q4 and a weak March. Kotak pegs net profit at 4414.2 crore for for Larsen & Toubro during Q4  growing 10.7% year-on-year and 49.8 % sequentially.  They expect core E&C business Ebitda margin at 9.9%, up 70 bps year-on-year on low base (flat on a two-year basis).

The overall revenue are expected to rise 16.7% year-on-year and 23.4% sequentially. 

Analysts at BNP Paribas also expect revenue growth to be in mid-teens. They say that Larsen & Toubro’s existing orderbook of 4.7 trillion is adequate to support strong sales growth in 4QFY24, leading to core (ex-services) sales of 49000 Crore (up 13% year-on-year).

Margin recovery to be watched for

The delay in completion of low margin legacy projects remains one key reason for caution on margin trajectory that as per analysts at Motilal Oswal Financial Services is expected to be mixed in 4QFY24.  L&T is expected to witness a material improvement in margins only by second Half Y25

The core margin recovery may still be elusive, say analysts at BNP Paribas. as we expect completion of lower-margin “legacy” contracts to slip into 1HFY25.

Also Read- Q4 results today: L&T, Tata Power, BSE, TVS Motor, Hero Motocorp, and Canara Bank to report Q4 earnings on May 8

Order in flows to remain strong

Analysts at BNP Paribas expect 4QFY24 order inflows at 82000 Crore ( up 8% y-o-y) based on contract awards  announced so far . They forecast net working capital (NWC) to sales (ex-finance) to be at 16% atend-FY24, resulting in substantial cash flows and overall ROeturn of Equity improving to 15% versus 12% in FY23.

Key Monitorable 

Most analysts remain watchful on FY25 guidance to be provided by Larsen & Toubro (L&T) . 

Analysts at Motilal Oswal Financial Services said that  Domestic tender pipeline, margin performance as well as working capital cycle remain among the key monitorable as per them.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions



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First Published:8 May 2024, 01:47 PM IST
HomeMarketsStock MarketsLarsen & Toubro Q4 results today: Here’s what analysts expect from financials to order in flows

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