Mumbai, October 30, 2024 :
Robust Order Inflow: ₹ 80,045 crore
Strong Execution Momentum; Revenue at ₹ 61,555 crore ↑21%
Order Book crosses ₹ 5 lakh crore
Consolidated PAT: ₹ 3,395 crore
Larsen & Toubro achieved Consolidated Revenues of ₹ 61,555 crore for the quarter ended September 30, 2024 registering a y-o-y growth of 21%, aided by an accelerated progress in the various businesses in Projects & Manufacturing (P&M) portfolio. International revenues during the quarter at ₹ 32,057 crore constituted 52% of the total revenues, largely reflective of a robust international P&M order book.
For the half-year ended September 30, 2024, the Consolidated Revenues at ₹ 116,674 crore recorded a y-o-y growth of 18% with international revenues during the half-year at ₹ 58,305 crore constituting 50% of the total revenues. The Company for the quarter ended September 30, 2024, posted a Consolidated Profit After Tax (PAT) of ₹ 3,395 crore, registering a growth of 5% compared to the corresponding quarter of the previous year.
Similarly, for the half-year ended September 30, 2024, Consolidated Profit After Tax at ₹ 6,181 crore, registered a growth of 8% y-o-y basis. Q2 & H1 Consolidated Profit After Tax (PAT) of the previous year had the benefit of a non-recurring gain of ₹ 512 crore from Transit Oriented Development (TOD) monetization in the Hyderabad Metro concession. Excluding this TOD monetization gain, the Consolidated Profit After Tax (PAT) for the quarter and the half-year ended September 30, 2024 have registered a growth of 25% and 19% respectively, over the corresponding period of the previous year.
The Company received orders of ₹ 80,045 crore at the group level during the quarter ended September 30, 2024, registering a sequential growth of 13% and a y-o-y degrowth of 10%. The corresponding quarter of the previous year had the benefit of receipt of two international ultra-mega orders in the Hydrocarbon business. During the quarter, multigeography orders were received across different segments like Renewables, Transmission & Distribution, Roads & Runways, Urban Transit, Nuclear Power, Hydel & Tunnel, Minerals & Metals, Factories, Precision Engineering and the Offshore vertical of Hydrocarbon business. International orders at ₹ 50,083 crore during the quarter comprised 63% of the total order inflow.
On a cumulative basis, the order inflow for the half-year ended September 30, 2024 stood at ₹ 150,982 crore. International orders at ₹ 82,680 crore during the half-year constituted 55% of the total.
The consolidated order book of the group as on September 30, 2024, is at ₹ 510,402 crore registers a growth of 7% over March 2024, with the share of international orders at 40%. Commenting on the results, S.N. Subrahmanyan, Chairman and Managing Director said: “ We have delivered yet another quarter of strong financial performance despite the continuing global macro economic volatility. The projects & manufacturing businesses of the Company continue to perform well. We have a record order book ₹ 5 lakh crore+ that is a testimony of our proven competence in the domains of engineering, construction, manufacturing, and project management.
Our new transformative investments in Green Energy, Data Centers, Digital Platforms and Semiconductor Design will, besides improving our Digital and Sustainability footprint, compliment our current business portfolio as well. India’s growth story remains intact on the back of continued public capex spends and a visible recovery in private investments as well. We expect the Middle East Capex momentum to remain healthy. The Company remains committed on delivering a sustained performance of growth.”
Infrastructure Projects Segment
A separate business vertical has been carved out for Renewable energy out of the Power Transmission & Distribution business within the Infrastructure segment to capitalize on the growth opportunities in a focused manner. This strategic move, comes as the global shift towards clean energy gains momentum, and driven by the need for decarbonized electricity to combat an all pervasive climate change.
The Infrastructure Projects segment secured order inflow of ₹ 49,522 crore, during the quarter ended September 30, 2024, registering a substantial growth of 77% on y-o-y basis aided by orders in Tranmission & Distribution and Renewable Energy. International orders constituted 63% of the total order inflow of the segment during the quarter.
The segment order book stood at ₹ 342,954 crore as on September 30, 2024, with the share of international orders at 32%.
For the quarter ended September 30, 2024, the customer revenues at ₹ 31,954 crore registered a strong y-o-y growth of 30%, aided by improved progress across various projects. International revenues constituted 45% of the total customer revenues of the segment during the quarter.
The EBITDA margin of the segment during the quarter ended September 30, 2024 was higher at 6.0% compared to corresponding quarter of the previous year at 5.4% aided by improved job progress.
Energy Projects Segment
The Energy Projects segment secured orders valued at ₹ 7,759 crore during the quarter ended September 30, 2024. In the corresponding quarter of the previous year, the segment order included two ultra-mega international orders in the Hydrocarbon business. International order inflow constituted 83% of the total order inflow during the quarter. The segment order book was at ₹ 117,154 crore as on September 30, 2024, with the international order book constituting 77%.
For the quarter ended September 30, 2024, the customer revenues at ₹ 8,873 crore registered a healthy growth of 31% y-o-y mainly on strong execution. International revenues constituted 69% of the total customer revenues of the segment during the quarter. The EBITDA margin of the segment was at 8.8% for the quarter ended September 30, 2024.
Hi-Tech Manufacturing Segment
The segment secured orders valued at ₹ 3,920 crore during the quarter ended September 30, 2024 registering a robust growth of 64% over the previous year, with receipt of high value orders in the Precision Engineering & Systems and Heavy Engineering businesses. Export orders constituted 37% of the total order inflow of the segment during the quarter.
The order book of the segment was at ₹ 35,611 crore as on September 30, 2024, with the share of export orders at 10%.
For the quarter ended September 30, 2024, the customer revenues at ₹ 2,063 crore registered a growth of 9% y-o-y, with peak execution ramp-up in certain jobs of the Precision Engineering & Systems business. International revenues constituted 15% of the total customer revenues of the segment during the quarter.
The EBITDA margin of the segment was at 12.8% for the quarter ended September 30, 2024.
IT & Technology Services (IT&TS) Segment
The segment recorded customer revenues of ₹ 11,798 crore for the quarter ended September 30, 2024, registering a modest y-o-y growth of 6%, reflective of the present market conditions. International billing contributed 93% of the total customer revenues of the segment for the quarter ended September 30, 2024.
The EBITDA margin for the segment was at 21.0% for the quarter ended September 30, 2024 higher compared to 20.2% in the corresponding quarter of the previous year. The improvement is largely due to a favourable exchange rate and higher other income.
Financial Services Segment
The segment recorded income from operations at ₹ 3,837 crore during the quarter ended September 30, 2024, registering y-o-y growth of 24% mainly attributed to a proactive portfolio management viz. higher retail disbursements with timely collections.
The total Loan Book at ₹ 93,015 crore grew by 9% as compared with March 2024 at ₹ 85,565 crore. Further, on a y-o-y basis the total Loan Book reported growth of 18%. The Retail loan book now constitutes 96% of the total loan book as on September 30, 2024. The segment PBT for the quarter ended September 30, 2024 increased from ₹ 796 crore to ₹ 940 crore, an increase of 18%, on improved NIM + Fees% on a higher loan book. The business has adequate macro prudential buffers to address possible headwinds in the retail finance sector.
Development Projects Segment
The segment recorded customer revenues of ₹ 1,382 crore during the quarter ended September 30, 2024 registering de-growth. The previous year included the monetization of a commercial property in Hyderabad Metro.
The segment EBIT for the quarter ended September 30, 2024 declined to ₹ 136 crore compared to corresponding quarter of the previous year, mainly due to the aforesaid reason.
“Others” Segment
“Others” segment comprises (a) Realty (b) Industrial Valves (c) Construction Equipment & Mining Machinery and (d) Rubber Processing Machinery.
Customer revenues of the segment during the quarter ended September 30, 2024 at ₹ 1,648 crore registered moderate growth of 2% y-o-y, primarily higher handover of residential units in Realty business. Export sales constituted 13% of the total customer revenues of the segment during the quarter, mainly pertaining to Industrial Valves business. During the quarter ended September 30, 2024, the segment EBITDA margin was at 25.1% higher vis-à-vis corresponding quarter of the previous year at 20.0% mainly due to profit from sale of commercial space in the Realty business and improved revenues in Valves business.
Note:
The key parameters of the Group and Segment Performance for the quarter and half-year ended September 30, 2024, are shown in Annexure 1.
Segment composition is provided in Annexure 2.
Outlook
The Indian economy has remained sanguine despite the ongoing global geopolitical turbulence and is poised for steady growth. The macro-economic parameters of inflation and growth are well balanced. Investment activity has remained resilient, with government capex rebounding from a contraction observed in the first quarter. Additionally, a new government policy offering employment-linked incentives to workforce and corporates could improve availability of skilled / trained labour. A better-than-expected south-west monsoon augurs well for the revival of the rural economy and consumption demand. With the government’s fiscal consolidation efforts, Government debt is projected to decrease. Further, consumer inflation is anticipated to remain range bound on account of improved agricultural output. Various high frequency indicators point towards a healthy growth momentum. Manufacturing activity is gaining on the back of improving domestic demand, lower input costs and a supportive policy environment.
The global economic perspective is one of cautious optimism. The continuing disruptions in the Red Sea are affecting global trade in terms of higher cost and longer lead time. Amidst all this upheavel, Middle East continues to expand its investments into Oil & Gas, industrialization and the various energy transition initiatives. China's Central bank unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary slide and back towards the path of growth. Lastly, heightened economic and financial market volatility is likely to continue in the short term with the US Presidential elections just around the corner.
The Company is confident that the various structural reforms undertaken by the Indian government in the last ten years, will improve the quality of India’s growth, besides setting a strong foundation to propel the realization of a Viksit Bharat by 2047. The Company remains committed on pursuing a technology driven growth and deliver profitable returns to all its stakeholders on a sustained basis.
Background:
Larsen & Toubro is a USD 27 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 Q2 2023-24