Mumbai, May 10, 2023 :
Order Inflow crosses ₹ 2 lakh crore for FY’23; ↑19% y-o-y
Recurring PAT crosses ₹ 10,000 crore level for FY’23; ↑21% y-o-y
Board recommends a final dividend of ₹ 24 per share
Larsen & Toubro achieved Consolidated Revenues of ₹ 183,341 crore for the year ended March 31, 2023 recording a healthy y-o-y growth of 17%, aided by strong execution of a large order book in the Infrastructure Projects segment and robust momentum in the IT&TS portfolio. International revenues during the year at ₹ 68,787 crore constituted 38% of the total revenue.
For the quarter ended March 31, 2023, the Consolidated Revenues at ₹ 58,335 crore recorded a y-o-y growth of 10%. The share of international revenues during the quarter was 39%. The Company for the year ended March 31, 2023, posted a total Consolidated Profit After Tax (PAT) of ₹ 10,471 crore, registering a robust growth of 21% compared to the previous year. The PAT includes an exceptional gain of ₹ 97 crore (net), attributed to profit on divestment of the Mutual Fund business of the Financial Services segment partly off-set by a one time charge due to remeasurement of the wholesale loan assets of the Financial Services segment at fair value.
For the quarter ended March 31, 2023, the PAT at ₹ 3,987 crore, registered a growth of 10% y-o-y basis.
The Board of Directors has recommended a final dividend of ₹ 24 per equity share, for the approval of shareholders.
The Company received orders worth ₹ 230,528 crore at the group level during the year ended March 31, 2023, registering a healthy y-o-y growth of 19%. During the year, orders were received across multiple segments like Public Spaces, Hydel & Tunnels, Irrigation Systems, Ferrous Metals, Oil & Gas, Power Transmission & Distribution and Defence sectors.
International orders at ₹ 86,523 crore during the year comprised 38% of the total order inflow.
The order inflow for the quarter ended March 31, 2023 stood at ₹ 76,099 crore, registering a growth of 3% over the corresponding quarter of the previous year. International orders at ₹ 36,046 crore constituted 47% of the total.
The consolidated order book of the group is at ₹ 399,526 crore as on March 31, 2023, with international orders having a share of 28%. The order book of ₹ 399,526 crore represents a growth of 12% over ₹ 357,595 crore as on March 31, 2022.
Infrastructure Projects Segment
The Infrastructure Projects segment secured order inflow of ₹ 117,119 crore, during the year ended March 31, 2023, registering a substantial growth of 25%, as compared to the previous year, on receipt of multiple large value orders across sub-segments. International orders at ₹ 26,184 crore constituted 22% of the total order inflow of the segment during the year.
The segment secured orders of ₹ 41,187 crore, during the quarter ended March 31, 2023, registering degrowth of 9% largely due to a high base, over the corresponding quarter of the previous year. International orders constituted 29% of the total order inflow for the quarter. The segment order book stood at ₹ 284,850 crore as on March 31, 2023, with the share of international orders at 22%.
For the year ended March 31, 2023, the customer revenue at ₹ 86,717 crore registered a healthy y-o-y growth of 20%, aided by ramp up of execution of the large value orders in the portfolio. International revenue constituted 22% of the total customer revenue of the segment during the year.
The segment recorded customer revenues of ₹ 31,222 crore for the quarter ended March 31, 2023, registering a y-o-y growth of 5%. International revenues constituted 27% of the total customer revenues of the segment during the quarter.
The EBITDA margin of the segment during the year ended March 31, 2023 was at 7.0% vis-à-vis 8.2% recorded in the previous year. Margin for the year remained subdued largely due to commodity price increases and logistic issues.
Energy Projects Segment
The Energy Projects segment secured orders valued at ₹ 30,750 crore during the year ended March 31, 2023, registering a degrowth of 5% y-o-y mainly on subdued tendering activity in the thermal power plants business. International order inflow constituted 61% of the total order inflow of the segment during the year.
The segment secured orders of ₹ 8,892 crore, during the quarter ended March 31, 2023, registering a healthy growth of 17% over the corresponding quarter of the previous year on the receipt of multiple international orders in Hydrocarbon business. International orders constituted majority of the total order inflow for the quarter.
The segment order book was at ₹ 72,463 crore as on March 31, 2023, with the international order book constituting 63%.
For the year ended March 31, 2023, the customer revenue at ₹ 24,907 crore registered a y-o-y growth of 6% with pick up in execution momentum mainly in Hydrocarbon business. International revenue constituted 39% of the total customer revenue of the segment during the year.
The segment achieved customer revenues of ₹ 7,916 crore during the quarter ended March 31, 2023, recording a healthy growth of 18% y-o-y. International revenues had a share of 47% of the total customer revenues for the quarter.
The EBITDA margin of the segment at 9.1% for the year ended March 31, 2023 improved compared to 7.8% over previous year, primarily on account of execution cost efficiencies. Hi-Tech Manufacturing Segment
The Hi-Tech Manufacturing segment secured orders valued at ₹ 15,762 crore during the year ended March 31, 2023 registering a substantial growth of 39% over the previous year, with large value orders bagged by the Defence Engineering business. Export orders constituted 17% of the total order inflow of the segment during the year.
The segment secured orders of ₹ 8,573 crore, during the quarter ended March 31, 2023, registering a significant growth of 41% over the corresponding quarter of the previous year. International orders constituted 9% of the total order inflow for the quarter. The order book of the segment was at ₹ 26,214 crore as on March 31, 2023, with the share of export orders at 13%.
For the year ended March 31, 2023, the customer revenue at ₹ 6,535 crore registered a y-o-y growth of 10%, with higher execution of orders in the Refinery Equipment sub-segment. International revenue constituted 24% of the total customer revenue of the segment during the year.
The segment posted customer revenues of ₹ 2,134 crore for the quarter ended March 31, 2023, registering a robust growth of 21% over the corresponding quarter of the previous year. Export sales comprised 30% of the total customer revenues for the quarter. The EBITDA margin of the segment at 18.0% for the year ended March 31, 2023 registered a decline compared to 19.6% reported in the previous year, mainly due to execution delays revolving around supply chain issues, additional cost provisions and change of job mix in the portfolio.
IT & Technology Services (IT&TS) Segment
During the year, Larsen & Toubro Infotech Limited and Mindtree Limited successfully completed their merger and started operating as a merged entity viz. LTIMindtree Limited w.e.f. November 14, 2022.
The segment recorded customer revenues of ₹ 40,737 crore for the year ended March 31, 2023, registering a robust y-o-y growth of 26%, reflecting the demand for tech-enabled services. International billing contributed 93% of the total customer revenues of the segment for the year ended March 31, 2023. The aggregate revenue of the two listed subsidiaries (LTIMindtree and L&T Technology Services) in this segment at USD 5,095 Mn registered a healthy y-o-y growth of 16%.
The segment recorded customer revenues of ₹ 10,645 crore for the quarter ended March 31, 2023, recording y-o-y growth of 21%. International billing contributed 93% of the total customer revenues. In USD terms, the segment revenues of 1,313 Mn for the quarter grew 12% on a y-o-y basis.
The EBITDA margin for the segment was at 20.7% for the year ended March 31, 2023 as compared to 23.3% in the previous year. The segment margin was impacted mainly due to one-time merger integration expenses in LTIMindree and elevated employee costs.
Financial Services Segment
The segment reflects the performance of L&T Finance Holdings (LTFH), a listed subsidiary. The segment recorded income from operations at ₹ 12,575 crore during the year ended March 31, 2023, registering y-o-y growth of 5%, mainly due to higher disbursements on the focussed retail book.
The segment recorded income from operations at ₹ 3,116 crore during the quarter ended March 31, 2023, registering y-o-y growth of 5%.
The total Loan Book at ₹ 80,893 crore degrew by 8% as compared with March 2022 at ₹ 88,341 crore mainly with planned reduction in Wholesale loan book on repayments and sell downs during the year. The Retail loan book increased by 35% while wholesale loan book shrunk by 53% during the year. The Retail loan book now constitutes 75% of the total loan book as on March 31, 2023.
The segment PBT for the year ended March 31, 2023 increased to ₹ 2259 crore as compared to ₹ 1470 crore in the previous year due to better NIM+Fees and lower credit costs arising from improved asset quality.
During the year, LTFH concluded the sale of mutual fund business to HSBC AMC.
Development Projects Segment
The segment recorded customer revenues of ₹ 5,024 crore during the year ended March 31, 2023 registering a healthy growth of 15% over the previous year, driven by a higher PLF in the Nabha Power Plant and increase in ridership in Hyderabad Metro. For the quarter ended March 31, 2023, the customer revenues at ₹ 1,229 crore, recorded a growth of 12% y-o-y.
The segment EBIT for the year ended March 31, 2023 registered a profit of ₹ 392 crore as compared to a loss of ₹ 231 crore during the previous year, primarily aided by consolidation of Nabha Power profit led by increase in benchmark valuations and improved Metro ridership.
During the year, the company entered into a Share Purchase Agreement with Edelweiss Alternatives, to sell its entire shareholding in L&T Infrastructure Development Projects Limited, a joint venture having multiple toll road concessions and a transmission line asset in its portfolio. Accordingly, the investment in the joint venture has been classified as “Held for Sale”, pending receipt of necessary approvals.
“Others” Segment
“Others” segment comprises (a) Realty (b) Industrial Valves (c) Smart World and Communication (SWC) business (d) Construction Equipment & Mining Machinery and (e) Rubber Processing Machinery.
Customer revenues during the year ended March 31, 2023 at ₹ 6,845 crore registered a healthy growth of 15% y-o-y, primarily on higher handover of flats & sale of commercial property in Realty business and improved demand in Construction Equipment and Rubber Processing Machinery business. Export sales constituted 8% of the total customer revenues of the segment during the year, majorly relating to Industrial Valves and Rubber Processing Machinery businesses.
The customer revenues of this segment during the quarter ended March 31, 2023 at ₹ 2,073 crore, has registered growth of 14% y-o-y. Export sales constituted 9% of the total customer revenues.
During the year ended March 31, 2023, the segment EBITDA margin at 18.1%, is in line with the previous year.
Note:
Group Performance – Key Parameters for the quarter and year ended March 31, 2023 is attached in Annexure 1
Segment-wise summary of performance for the quarter and year ended March 31, 2023 is attached in Annexure 2
Outlook
India’s economic growth continues to display encouraging resilience amidst the continuing global chaos. Prudent fiscal and monetary policy management from the Government and RBI respectively has resulted in partial decoupling of India growth story with the rest of the world. The Government’s push for growth through larger infrastructure spends is clearly evident from the enhanced budgetary allocations for FY 2023-24. PLI incentives, improved business confidence and buoyant demand conditions will continue to facilitate the positive environment.
Going forward, improved tax collections for the Government will support its Capex led growth aspiration. Further, bank balance sheets are healthy providing opportunities to lend funds to projects. With the Government’s enhanced thrust towards manufacturing and exports, the country’s goods trade deficit should narrow over time. India is committed to Net Zero goals and both the Government and the private sector are committed to investments around energy transition. Amidst, these various moving parts, the silver lining is that India would remain one of the fastest growing economies in the world.
The last two years have seen the global economy striving to deal with overlapping crises, the latest being the liquidity troubles after a series of global bank crises. While the impact appears to have been contained, these uncertainties continue to undermine the confidence among consumers and businesses to spend, thereby impacting global growth. Governments and Central Banks across the world are attempting to strike a balance between containing cost push inflation and pursuing demand led growth.
Nevertheless, a combination of China’s reopening, a significant easing of the natural gas crisis in Europe and a resilient US consumer confidence should help the global economy across over the current uncertainty overhang. With OPEC and partner countries announcing unexpected production cuts, oil prices are likely to remain firm at current levels, aiding the GCC nations to pursue their capex plans in oil, infrastructure, green energy and other industrial sectors.
In this backdrop, the Company will focus with cautious optimism on (a) large project wins (b) timely execution of its large order book, (c) growth of its services portfolio in the stated glide path and (d) preservation of liquidity and optimum use of capital and other resources. The Company is optimistic about its growth aspirations in the medium term despite a uncertain macro environment and is committed to creation of sustainable value to all its stakeholders.
Background:
Larsen & Toubro is a USD 23 billion Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services. It operates in over 50 countries worldwide. A strong, customer–focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for eight decades.
Financial Results Q4 2022-23