Analysts expect engineering, procurement, and construction (EPC) major Larsen and Toubro (L&T) to continue its growth trajectory in March quarter on the back of strong order inflow. The company is expected to announce its Q4FY25 results on May 8.
According to the average of a Moneycontrol poll of seven brokerages, the revenue of the construction major is likely to increase nearly 13 percent year-on-year (YoY) to Rs 75,979 crore, up from Rs 67,079 crore in the previous fiscal. Net profit is expected to increase around 10 percent YoY from Rs 4,396 crore. Earnings before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin is expected to increase to around 10.9 percent from 10.8 percent in Q4FY25.
The most optimistic of the brokerages is Philip Capital which estimates net profit to grow to Rs 5,451 from Rs 4,396 crore in Q4FY25, which is a 24 percent increase and most pessimistic is Elara Capital, which estimates net profit to be around Rs 3,890 crore, a decrease of 11 percent.
What will drive the earnings
Analysts at Elara Capital noted that the infrastructure sector is seeing signs of pick-up and initial signs are brewing of a rise in capacity enhancements by large conglomerates, thus indicating potential business for engineering and construction plays. Large diversified EPC players like Larsen and Toubro are expected to be beneficiaries.
Continued order inflow
In March 2025, L&T received an ultra-mega order of around Rs 15,000 crore from Qatar Energy LNG in its Hydrocarbon vertical. This is estimated to be the company’s single largest order in history. Most brokerages remain optimistic. Analysts at Nuvama expect robust P&M (Plant and Machinery) segment order inflows of around Rs 90,000 crore (up by 61 percent YoY). L&T’s order backlog as of December 2024 stood at Rs 5.64 lakh crore. Elara Capital notes that L&T’s inflows were boosted by international orders, which formed 60 percent of the total announcements during the FY2025 and Q4FY2025. A recent BNP Paribas report added that order inflows for L&T have exceeded street estimates in the past four quarters despite the bearish outlook on the stock. "We believe the recent narrative of L&T’s order inflows shrinking in FY2026 (due to a possible drop in crude oil prices) is misplaced. Our deep dive into the Middle East prospects highlights that tendering could remain robust in CY2025-26," the report noted.
Strong execution
Most brokerages expect the conglomerate to report a steady YoY growth in revenue and net profit on the back of execution in segments such as Energy and Infrastructure. P&M segment is also expected to contribute to the revenue growth. Analysts at Nuvama estimate the P&M segment revenue/EBITDA to grow by 8 percent YoY in Q4FY25.
What to look out for in quarterly earnings show?
Analysts will keep an eye on order pipeline - domestic and international, margin performance, as well as working capital cycle.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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