Engineering conglomerate Larsen and Toubro (L&T) is set to announce its third quarter results for financial year 2012-13 on Thursday. Analysts on an average are expecting a moderately healthy set of results for October-December quarter.
Engineering conglomerate Larsen and Toubro (L&T) is set to announce its December quarter earnings later in the day. Analysts on an average expect a moderately healthy set of results on the back of decent ordersize from buidlings and urban infra segments, partly making up for poor order book from power space.
Analysts expect profit after tax of the company to grow by 14 percent, year-on-year to Rs 1,130 crore on healthy margin on a few big ticket projects.
The company will benefit from a low base in third quarter as in a year ago period; it had reported exchange losses of Rs 400 crore.
Revenues are seen going up by 15.2 percent to Rs 16,120 crore from Rs 13,999 crore during the same period on timely execution of projects.
Earnings before interest, tax, depreciation and amortisation (EBITDA) is likely to rise by 25.8 percent YoY to Rs 1,689 crore. EBITDA margin is seen improving 90 basis points YoY to 10.5 percent.
Meanwhile, shares of the company were down 1.99% to Rs 1530 ahead of earnings announcement.
L&T's order book stood at Rs 1.59 lakh crore at the end of second quarter of FY13. Analysts expect order inflows to be a tad bit disappointing at around Rs 1,6000, down five perceont, YoY due to macro headwinds.
L&T has already announced 60 percent of its order inflows during the quarter itself. Analysts believe, the company should witness an increase in slow moving orders this quarter.
According to brokerages, the company needs a run rate of over Rs 45,000 crore to achieve its full year guidance of Rs 85,000 crore order inflows, which is around 20% up,YoY.
Prabhudas Lilladher and Angel Broking find L&T better placed than industry peers and have assigned an 'accumulate' rating on it with a target price of Rs 1749. Motilal has a 'buy' on the stock as it has delivered a 61% return despite the IIP growth being almost nil throughout the year. The firm expects L&T to benefit most if there is any revival in infra investment cycle.
However, the stock has been seen a slew of downgrades recently from many brokerages, although brokerages continue to like L&T over BHEL.
According to them, main concerns are order cancellations of approximately Rs 1,500 crore in Q2FY13 plus slow-moving orders which now form around 10 percent of backlog.
Rising working capital also remains cause of concern for the company.
Brokerages feel now the company will at best be a sector outperformer but will lose the ability to outperform the markets in CY13.