- Larsen’s net income for 4Q came in at a whopping 43.96 billion rupees, marking a 10% year-to-year increase and beating estimates of 42.75 billion rupees.
- The company saw revenue growth of 15% compared to the previous year, totalling 670.8 billion rupees thereby surpassing the 658.69 billion rupees estimate.
- Infrastructure revenue had a startling rise of 22% compared to previous year, coming in at 383.7 billion rupees. This was well above the predicted 356.49 billion rupees.
- Revenues from various sectors showed varying growth rates; Energy projects increased by 3.7%, Hi-Tech Manufacturing by 11%, IT & technology services by 3.4%, Financial Services by 15%, Development Projects by 2.4% and Other revenue areas saw a 33% increase.
- Total costs for the company rose by 16% compared to the same period last year, totalling at 617.9 billion rupees.
- Other income saw a remarkable 40% increase, amounting to 10.4 billion rupees.
- The company experienced a brief slump in order flow at -5.2%. However, it exceeded expectations with the order inflow totalling 721.5 billion rupees compared to an estimated 639.3 billion rupees.
- By the end of the period, the order book stood high at 4.76 trillion rupees, a 19% increase year-over-year.
- International orders made up 38% of the total order book.
- Earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 5.9% year over year, reaching 72.3 billion rupees.
- EBITDA margin was 10.8%, slightly lower than 11.7% from a year ago.
- A dividend per share of 28 rupees was declared.
- Siddhartha Mohanty has been approved for appointment as a Director.
- The company concluded the sale of its stake in L&T Idpl.
- Chairman S.N. Subrahmanyan voiced confidence in new age businesses such as Green Energy, Semiconductor Chip Design, Digital Platforms and Data Centers for harnessing the power of technology and complimenting growth in traditional core businesses.
- The Chairman also affirmed a focus on profitable execution of the strong order book record high, supported by a strong balance sheet, diversified business portfolio, and proven execution capabilities amidst the volatile business environment.
- The company anticipates that a combination of public and private capex spending will drive India’s growth in the upcoming years.
Larsen & Toubro on Smartkarma
Analyst coverage of Larsen & Toubro (LT) on Smartkarma reveals a positive outlook amidst margin concerns. According to a report by Tina Banerjee, LT reported a strong order inflow in Q3FY24, contributing to a robust order book standing at INR 4.7tn by December 2023. Despite margin pressures due to cost issues in legacy projects, the company is expected to drive future growth through strong project execution. Banerjee anticipates margins to improve after reaching a low point, highlighting the potential for recovery in upcoming quarters.
This analysis underscores the resilience of Larsen & Toubro in maintaining a solid order book despite margin challenges. The research emphasizes the importance of efficient execution and a healthy order pipeline in driving growth for the company. With margins projected to recover and a positive sentiment towards LT’s future prospects, investors may find confidence in the company’s ability to navigate challenges and capitalize on opportunities in the construction and engineering sector.
A look at Larsen & Toubro Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 4 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 4 | |
| OVERALL SMART SCORE | 3.2 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on the Smartkarma Smart Scores, Larsen & Toubro exhibits a mixed long-term outlook across various factors. With a solid Dividend score of 4 and Momentum score of 4, the company shows strength in rewarding shareholders and maintaining positive market momentum. However, its Value, Growth, and Resilience scores are in the mid-range, suggesting room for improvement in these areas.
Larsen & Toubro Ltd, a company engaged in manufacturing engineering equipment and undertaking large-scale projects, appears to be in a stable position with room for growth and value enhancement. The company’s diverse product portfolio, including heavy machinery and infrastructure projects, positions it well within the industry. By focusing on improving its Value, Growth, and Resilience scores, Larsen & Toubro may enhance its overall long-term performance and competitiveness in the market.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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