Engineering and construction major Larsen and Toubro (L&T) is likely to report healthy growth in revenues and profit for the first quarter, led by energy and services businesses. The company will announce its results on July 24.
Revenues for the first quarter are likely to jump 8% year-on-year, according to an average estimate of four brokerages, while net profit is seen rising 11% year-on-year.
Key monitorables in the results include management commentary on international order prospects, domestic tendering activity, working capital, and performance of Hyderabad Metro.
In the preceding March quarter, the infrastructure major posted 10% growth in its consolidated net profit at Rs 4,396 crore. For the same period, consolidated revenues stood at Rs 67,079 crore, showing a growth of 15% year-on-year.
Here’s what analysts expect from L&T’s Q1 results.
Prabhudas Lilladher
We expect L&T to report consolidated revenue growth of 8% year-on-year. However, projects and manufacturing execution may be impacted by labour shortages.
EBITDA margin is likely to remain flattish at 10.2%. During the quarter, L&T announced an order intake in the range of Rs 165-300bn, led by solar energy, buildings and factories and hydrocarbons.
Kotak Equities
We expect 4% year-on-year growth in core EPC revenues as we bake in weakness in execution in the months of May (elections) and June (hot weather), high base and constraints on labour availability. We note that the majority of revenues for L&T comes from the center/state/CPSE customers, where aggregate capex for April-May is down 23%.
We expect core E&C business EBITDA margin at 8%, up 50 bps year-on-year on a low base of margin. This compares to 8.5% assumption for full year and 8.2% reported in FY2024
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Motilal Oswal
Expect consolidated revenue growth of 12% year-on-year, led by 14% year-on-year core E&C revenue growth. We expect core E&C EBITDA margin of 7.5%, flat on a YoY basis.
Key monitorables include domestic tender pipeline, margin performance as well as working capital cycle. We would also look out for execution ramp-up in Saudi projects and how the Middle East pipeline is shaping up.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
