L&T Q4 net profit rises 10% to Rs 4,396 crore, in line with estimates; declares Rs 28 dividend

L&T's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) margin for Q4FY24 came in at 10.8 percent compared to 11.7 percent a year ago.

For the complete year 2023-24, the company's EBITDA margin came in at 10.6 percent down from 11.3 percent a year ago.

The company said the order inflow for the quarter ended March 31, 2024 stood at Rs 72,150 crore, registering a de-growth of 5 percent over the corresponding quarter of the previous year when order inflows stood at Rs 76,099 crore.

International orders were at Rs 25,217 crore, constituting 35 percent of the total order inflows.

The consolidated order book of the group is at Rs 475,809 crore as on March 31, 2024, with international orders having a share of 38 percent, L&T said. The order book of Rs 4,75,809 crore represents a growth of 20 percent over Rs 3,99,526 as on March 31, 2023 and Rs 357,595 crore as on March 31, 2022.

For the full year FY24, the order growth was at 31 percent overshooting the order inflow growth guidance of 12-15 percent.

OUTLOOK

Going forward, L&T expects India's economic growth momentum to continue in the medium term facilitated by both public and private capital investment.

"India's growth momentum is likely to continue in the medium term backed by the sustained strength in domestic demand, easing of inflationary pressures, focused fiscal spending by the government and a strong manufacturing revival through new age greenfield investments and brownfield expansion across sectors," the company said in a stock exchange filing.

However, despite the strong growth momentum expected domestically, L&T expects a slowdown in order inflows from international markets.

"US Presidential elections in November is expected to contribute to the economic volatility. Elsewhere, the UK and Europe economies are still fragile and concerns around real estate bubble in China could further dampen economic revitalization," the company said.

L&T added that the Middle East region or West Asian countries have also felt the impact of the ongoing conflict in the and disruptions in the Red Sea and going forward if the conflict continues, it could have an adverse economic impact on the region.

L&T's international order inflow fell in Q4FY24, nearly 70 percent of L&T international order inflow comes from West Asian or Middle Eastern countries. The company's international order inflow during Q4FY24 stood at Rs 25,217 crore, down from Rs 36,046 crore in the same period last year.

On May 8, L&T's shares on BSE closed trading 1.6 percent higher at Rs 3,482.75 apiece.

Infrastructure Projects Segment

Segment-wise, L&T’s infrastructure projects segment secured order inflows of Rs 31,340 crore, during the quarter that ended March 31, 2024, which was 24 percent lower when compared to the corresponding quarter of the previous year, largely due to the receipt of some high-value orders in the previous year, L&T said.

The segment order book stood at Rs 311,665 crore as of March 31, 2024, with the share of international orders at 22 percent. The segment order book stood at Rs 317,693 crore as of December 31, 2023.

Revenues from the segment rose 22 percent on year to Rs 38,035 crore while profit from the segment rose 26.3 percent on year to Rs 2,630 crore.

The rise in profit was mainly on account of a rise in operating profit margin from the segment which rose to 7.9 percent in Q4FY24 from 7.5 percent in the same period a year ago.

L&T's infrastructure projects segment had seen a sequential fall in operating margins for the seven quarters as the company won infrastructure projects at very aggressive prices after the post-COVID-19, post-Russia-Ukraine (conflict) period in 2022-23.

The company's chief financial officer R Shankar Raman Raman said that L&T expects its operating margin to start improving from the next financial year as orders won at aggressive prices in 2022-23 will complete execution and new orders start being carried out.

At the end of June 2023, around 35-40 percent of L&T's then order book of Rs 3,01,159 crore from the infrastructure projects segment was made up of orders that were won at aggressive prices.

Energy Projects Segment

L&T secured order inflows of Rs 13,120 crore in this segment, during the quarter that ended March 31, 2024, which was nearly 48 percent higher when compared to the corresponding quarter of the previous year.

Energy Projects' Segment order book stood at Rs 118,189 crore as on March 31, 2024, with the international order book constituting 80 percent.

Revenues from the segment rose 4 percent on year to Rs 8,205 crore while profit from the segment rose 11.6 percent on year to Rs 860.6 crore.

The EBITDA margin of the segment came in at 11.4 percent for the quarter that ended March 31, 2024, improved compared to 10.4 percent over the corresponding quarter of the previous year, mainly on account of job savings in hydrocarbon and customer claim settlements in the power
business.

Hi-Tech Manufacturing Segment

L&T secured order inflows of Rs 8,790 crore in this segment, during the quarter that ended March 31, 2024, which was 3 percent higher when compared to the corresponding quarter of the previous year.

The Hi-Tech Manufacturing Segment order book stood at Rs 31,975 crore as of March 31, 2024, with the international order book constituting 8 percent.

Raman said that order inflow in the company's Hi-Tech Manufacturing segment has been slow in the first half of FY24 due to the delays in the government awarding defense contracts.

"Going forward we expect the government to aggressively come out with defense orders which will help order inflow of our Hi-Tech Manufacturing segment," Raman said.

Revenues from the segment rose 15 percent on year to Rs 2,462 crore while profit from the segment fell 5 percent on year to Rs 356.79 crore.

IT & Technology Services Segment

L&T's revenues from this segment rose to Rs 11,244 crore in this segment, during the quarter that ended March 31, 2024, which was 3 percent higher when compared to the corresponding quarter of the previous year.

International billing contributed 91 percent of the total customer revenues of the segment.

Profit from the segment rose 1.7 percent on the year to Rs 1870 crore. The EBITDA margin for the segment was at 20 percent for the quarter as compared to 19.7 percent in the corresponding quarter of the previous year.

The segment margin improved due to improved utilization levels in LTIMindtree.