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Last Updated : Jan 22, 2020 06:09 PM IST | Source: Moneycontrol.com

L&T Q3 profit grows 15.2%, says on track to meet FY20 order inflow guidance

Order inflow in Q3 declined 13.9 percent compared to previous quarter and fell 1.5 percent year-on-year.

 
 
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Infrastructure and engineering major Larsen & Toubro (L&T) reported profit growth of 15.15 percent year-on-year (YoY) to Rs 2,352 crore in the quarter ended December 2019, driven by lower tax cost (down 37 percent YoY) and operating income.

Profit for the same quarter last year was Rs 2,041.62 crore.

Revenue from operations in Q3FY20 grew 5.9 percent to Rs 36,242.68 crore YoY impacted by execution in the infrastructure business, missing the estimates of Rs 39,330 crore of a poll of analysts by CNBC-TV18 .

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Infrastructure segment recorded revenue of Rs 17,249 crore for the quarter, registering a 5 percent YoY decline. "Challenges faced in projects in Andhra Pradesh and for a short duration in Maharashtra and Delhi,

coupled with lower fund allocation in some states adversely impacted the execution progress," company reasoned.

L&T said it won new orders worth Rs 41,579 crore during the quarter amid subdued business environment, taking total consolidated orderbook to Rs 3.06 lakh crore as of December 31, 2019.

"International orders during the quarter at 17,901 crore increased to 43 percent of the total order inflow, on large value order wins in power transmission a distribution and metallurgical and material handling business," it added.

Order inflow in Q3 declined 13.9 percent compared to previous quarter and fell 1.5 percent year-on-year.

While addressing press conference, R Shankar Raman, CFO said L&T was on track to meet the full year (FY20) order inflow growth guidance of 10-12 percent YoY and maintained revenue growth forecast at 12-15 percent. "Order inflows are robust despite deferrals in order booking and we have revenue visibility for next 2-2.5 years."

"International markets grew at a faster pace versus domestic market. We are hopeful that growth momentum for infra segment will come back in coming quarters," he said.

On the operating front, consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 9.8 percent year-on-year to Rs 4,117.7 crore and margin expanded 40bps YoY to 11.4 percent for the quarter despite lower execution, which were mixed in terms of analyst expectations.

EBITDA was estimated at Rs 4,340 crore and margin at 11 percent for the December quarter, according to average of estimates of analysts polled by CNBC-TV18.

At operating level, infrastructure segment showed at 15.5 percent YoY growth in earnings before interest and tax (EBIT) at Rs 884.3 crore and 90bps margin expansion YoY at 5.1 percent for quarter ended December 2019.

Power business degrew 23.1 percent YoY to Rs 698.3 crore on a depleted opening order book and the new awards yet to pick up execution momentum, said the company in its BSE filing. Its EBIT fell 9.7 percent, but margin grew 30bps YoY.

Revenue from its heavy engineering business increased 16.4 percent year-on-year to Rs 806 crore, with opening order book gaining execution momentum. Its EBIT grew by 51.6 percent YoY to Rs 159 crore and margin surged 460bps YoY to 19.7 percent for the quarter.

L&T reported a 1.9 percent year-on-year growth in defence engineering business at Rs 1,064.7 crore for the quarter led by noteworthy progress in execution of a marquee order for tracked artillery

guns, with EBIT rising 228 percent YoY and margin expanding 1,180bps YoY.

Hydrocarbon segment registered a 16.3 percent YoY rise in revenue at Rs 4,392.6 crore on strong execution momentum in onshore vertical, with EBIT increasing 82.7 percent to Rs 493 crore and margin rising 410bps YoY.

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First Published on Jan 22, 2020 05:48 pm
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