5 key takeaways from L&T Q2 results

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26 Aug, 2025 12:21

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Shishir AsthanaMoneycontrol Research5 takeaways from Larsen & Toubro results:

L&T surprised the market with a sharp 84 percent bottom-line growth at Rs 1,436.6 crore. Market expected a net profit of Rs 890 crore (a de-growth of 11 percent) which would include an exceptional gain of Rs 310 crore. Analysts were, however, more or less on the mark as far as sales is concerned with projected growth of 8 percent. The company posted 8.2 percent revenue growth.

Here are five key takeaways from L&T results on how it managed to overshoot expectations and what lies ahead for the company.-Heavy monsoons and delayed start to new projects was expected to weigh on the company’s performance, as construction accounts for 30 percent of the revenue. However, the company surprised with a reasonably strong showing in the infrastructure segment, where revenue grew by Rs 11,177.70 crore to Rs 11,596.91 crore posting 3.7 percent growth. Profits for the segment fell from Rs 805.71 crore to Rs 644.95 crore. L&T pointed out there were delays in getting clearances from the customers' end which impacted progress of a few jobs.-Heavy Engineering division posted strong numbers with a 24 percent revenue growth at Rs 755 crore. Loss of Rs 105.35 crore posted in September 2015 was wiped out and the company posted profits of Rs 80 crore. Exports growth of 34 per cent helped the company post stronger numbers in the division. However, the division may be under pressure going forward as its order book has declined 10 percent despite international division orders increasing by 54 percent. The order inflow highlights the slowing down of domestic capex.-Short-term borrowings of the company continues to rise from Rs 14.900.71 crore to Rs 18,175.38 crore. Analysts had raised the issue of rising debt levels in the company. Though long term borrowing are flat, interest cost for the company has increased from Rs 1,205.65 crore to Rs 1,342.94 crore. Interest charge now eats away almost one-third of the company’s operating profit.-The company is likely to miss on both order book and revenue guidance for the year. During the quarter order inflow increased 11 percent to Rs 31,119 crore with international orders increasing by 24 percent to Rs 7,386 crore. Consolidated order book has increased by 4 percent on a year-on-year (YoY) basis to Rs 251,773 crore. L&T had guided for 15 percent growth in order book and a 12-15 percent revenue growth.-Given the current economic scenario, L&T said business condition remains challenging and recovery would be neither dramatic nor rapid. Given the first half growth and the hawkish commentary L&T management might revise their guidance lower.