Mumbai, July 26, 2021 :
Revenues up by 38% y-o-y driven by improved execution PAT at ₹ 1,174 crore, up by ₹ 871 crore as operations stabilize Order inflow registers growth of 13% Large orderbook to sustain growth momentum
Mumbai, July 26, 2021
Larsen & Toubro achieved Consolidated Revenues of ₹ 29,335 crore for the quarter ended June 30, 2021, registering a y-o-y growth of 38%, attributed to healthy execution of projects despite the second wave of Covid-19 affecting operations at many locations. Project progress was impacted with regional lockdowns, shortage of industrial oxygen and supply chain disruptions. The International revenues during the quarter at ₹ 11,186 crore constituted 38% of the total revenue.
The Company posted Consolidated Profit After Tax (PAT) of ₹ 1,174 crore registering substantial y-o-y growth of 287% over the corresponding quarter of the previous year.
The Company bagged orders worth ₹ 26,557 crore at the Group level during the quarter ended June 30, 2021 registering a growth of 13% over corresponding period of the previous year. During the quarter, orders were received in various segments like Metros, Rural Water Supply, Minerals and Metal, Residential, Power Transmission and Distribution, Power and Hydrocarbon Offshore sectors. International orders at ₹ 9,045 crore during the quarter comprised 34% of the total order inflow.
The consolidated order book of the group was at ₹ 323,721 crore on June 30, 2021, with international orders at 20% of the total order book.
Infrastructure Segment
Infrastructure segment secured orders of ₹ 11,023 crore, during the quarter ended June 30, 2021, registering a marginal decline over the corresponding quarter of the previous year, mainly due to pandemic induced delay in tendering activities and finalization of orders. International orders at ₹ 1,058 crore constituted 10% of the total order inflow of the segment during the quarter.
The segment order book was at ₹ 244,621 crore on June 30, 2021, with the share of international orders in the order book at 20%.
The segment recorded customer revenues of ₹ 10,409 crore for the quarter ended June 30, 2021, registering y-o-y growth of 63% with better execution momentum. International revenues constituted 23% of the total customer revenues of the segment during the quarter.
The EBITDA margin of the segment during the quarter ended June 30, 2021 was at 7.1% vis-à-vis 6.3% recorded in the corresponding quarter of the previous year. Better job mix and higher recovery of overheads contributed to margin improvement despite the commodity price inflation affecting the input costs.
Power Segment
The Power segment recorded order inflow of ₹ 911 crore for the quarter ended June 30, 2021, registering substantial growth compared to the corresponding quarter of the previous year on receipt of an order for Flue Gas Desulphurisation (FGD) project.
The order book of the segment was at ₹ 12,907 crore on June 30, 2021, with the international order book constituting 5% of the total order book.
The segment recorded customer revenues of ₹ 759 crore for the quarter ended June 30, 2021, recording growth of over 100% over corresponding quarter of the previous year with projects in the order book gaining execution momentum. International revenues constituted 4% of the total customer revenues of the segment during the quarter.
The segment EBITDA margin for the quarter ended June 30, 2021 was at 2.5%, higher compared to corresponding quarter of the previous year.
Heavy Engineering Segment
The Heavy Engineering segment recorded an order inflow of ₹ 567 crore during the quarter ended June 30, 2021, recording a y-o-y growth of 19% with a spurt of orders in Refinery and Oil & Gas segments. International orders constituted 52% of the total order inflow of the segment during the quarter.
The order book of the segment was at ₹ 4,373 crore on June 30, 2021, with export orders constituting 32% of the total order book.
The segment recorded customer revenues of ₹ 548 crore for the quarter ended June 30, 2021, recording a y-o-y growth of 45% across all businesses on improved project execution. International sales constituted 51% of the total customer revenues of the segment during the quarter.
The EBITDA margin of the segment at 17.9% for the quarter ended June 30, 2021 registered marginal growth over 17.5% of the corresponding quarter of the previous year.
Defence Engineering Segment
Defence Engineering segment recorded order inflow of ₹ 516 crore during the quarter ended June 30, 2021, registering substantial growth over the corresponding quarter of the previous year.
The order book of the segment was at ₹ 7,687 crore on June 30, 2021, with export orders constituting 9%.
The segment recorded customer revenues of ₹ 689 crore during the quarter ended June 30, 2021, recording a y-o-y growth of 46% on the back of strong execution of projects in the Weapons & Engineering System business. International revenues constituted 25% of the total customer revenues of the segment during the quarter.
The EBITDA margin of the segment at 20.3% was higher for the quarter ended June 30, 2021 as compared to 12.9% of the corresponding quarter of the previous year due to change in job mix and contingency releases.
Hydrocarbon Segment
The Hydrocarbon Segment secured orders valued at ₹ 1,002 crore during the quarter ended June 30, 2021. International order inflow constituted 80% of the total order inflow of the segment during the quarter.
The segment order book was at ₹ 40,825 crore on June 30, 2021, with the international order book constituting 36%.
The segment recorded customer revenues of ₹ 4,190 crore during the quarter ended June 30, 2021, recording a y-o-y growth of 37% with peaking of execution activities in the onshore vertical segment. International revenues constituted 36% of the total customer revenue of the segment for the quarter.
The EBITDA margin of the segment at 9.6% for the quarter ended June 30, 2021 registered growth over 5.3% of the corresponding quarter of the previous year.
IT & Technology Services (IT&TS) Segment
The segment comprises (a) L&T Infotech (b) L&T Technology Services and (c) Mindtree.
The segment recorded customer revenues of ₹ 7,222 crore during the quarter ended June 30, 2021, recording an industry leading q-o-q growth of 7% & y-o-y growth of 20%, reflecting a surge in demand for technology led offerings in the sector. Export billing constituted 93% of the total customer revenues of the segment for the quarter.
The EBITDA margin for the segment increased to 23.1% for the quarter ended June 30, 2021 as compared to 20.7% in the corresponding quarter of the previous year, attributed to improved manpower utilization, increased offshoring and operational efficiency.
Financial Services Segment
Financial Services segment recorded income from operations at ₹ 3,061 crore during the quarter ended June 30, 2021, registering a y-o-y decline of 7% on account of decline in loan book.
The Loan Book decreased to ₹ 88,440 crore as compared with June’20 level at ₹ 98,879 crore, reflecting a cautious lending approach, focus on collections, portfolio sell down, pre-payments in certain verticals and run down of the de-focused business portfolio.
The operating margin of the segment for the quarter ended June 30, 2021 was higher at 8.4% as compared to the corresponding quarter of the previous year with higher NIM% achieved on reduced cost of borrowing.
Developmental Projects Segment
The segment recorded customer revenues of ₹ 1,126 crore during the quarter ended June 30, 2021, recording a y-o-y growth of more than 100%, mainly due to higher PLF witnessed in the Rajpura thermal power plant. Unlike in previous year, where the Hyderabad Metro services were completely shut, the services remained partially operational in the current year albeit with restrictive timings due to localized lockdown, affecting the ridership. The profits in the segment continue to be adversely impacted due to the severe under-utilization of the Metro services.
“Others” Segment
“Others” segment comprises (a) Realty, (b) Construction & Mining Machinery, (c) Rubber Processing Machinery, (d) Industrial Valves and (e) Smart World and Communication businesses.
The customer revenues of this segment during the quarter ended June 30, 2021 at ₹ 1,329 crore, recorded a y-o-y growth of 86% with higher handover of residential flats in the Realty business, better progress of projects in Smart World & Communication and higher demand in Construction Equipment and Rubber Processing Machinery business. Export sales constituted 8% of the total customer revenues of the segment during the quarter, majorly pertaining to the Industrial Valves business.
During the quarter ended June 30, 2021, the segment EBITDA margin at 15.2%, was higher compared to 6.7% in the corresponding quarter of the previous year primarily aided by revenue growth across all the businesses.
Outlook
The financial year commenced with the country witnessing a more severe second wave of Covid-19, affecting consumption demand and the investment momentum, both of which resulting in the scaling down of the Indian GDP growth forecast.
With the waning of the second wave of the pandemic and lockdown restrictions progressively being eased in the recent weeks, signs of pick-up in economic activity is visible. Further, with expectation of a repeat normal monsoon, agriculture sector is likely to remain buoyant. The economy is expected to gain lost ground, aided by the fiscal stimulus packages announced, adoption of new Covid compatible occupational models by businesses and the vaccination efforts gathering momentum. Also, with external demand strengthening, a rebound in global trade is expected, providing fillip to the country’s exports.
Globally, Government stimulus packages are helping to boost demand and businesses are adapting better to the emerging physical and economic realities. The sustained high oil prices is expected to boost the investment momentum in GCC nations. The recovery however may remain uneven as the global economy continues to be vulnerable to future setbacks due to mutated variants and waves of the Covid-19 virus as evidenced by reintroduction of lockdown restrictions by some countries while others are engaged in progressive unlocking.
The Company’s focus continues to be on efficient execution of its large order book, working capital reduction, cost optimization through use of digital technologies aimed at operational efficiencies and driving an agile Balance Sheet. The Company is optimistic of its growth aspirations in the medium term as the economic outlook improves and is committed to creation of sustainable returns to stakeholders.
Background:
Larsen & Toubro is an 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
Press Release and Financial Results Q1 2021-22