L&T Q4 Results | Profit misses estimates, EBITDA margin under pressure: Key highlights

Larsen & Toubro Ltd on May 12 reported lower-than-expected profit as higher prices of commodity and fuel impacted margins. The firm posted a 10 percent rise in its consolidated net profit to Rs 3,621 crore from Rs 3,293 crore a year ago. Revenue for the quarter stood at Rs 52,851 crore, up 10 percent from the year-ago period.

Profit was estimated at Rs 3,950 crore on a revenue of Rs 53,100 crore for the quarter, according to the average estimates of analysts polled by CNBC-TV18.

The continuing fluctuations in prices of crude oil and other commodities owing to the current geopolitical uncertainties is leading to high input prices for industries and consumers. The resultant supply chain disruptions could pose a threat to the growth plans of the country in the short-term, the company said.

Here are the few highlights of March quarter earnings:

1) The company bagged orders worth Rs 73,941 crore during the quarter ended March 2022, a growth of 46 percent over the corresponding quarter of last fiscal, with international orders contributing 44 percent of the total order inflow. In the infra segment, the firm got Rs 45,054 crore orders, hydrocarbon segment received Rs7402 crore, power segment got Rs 207 crore orders, heavy engineering Rs 720 crore while defence engineering got Rs 5,377 crore in orders in the quarter. IT segments got orders worth Rs 8,761 crore while other segments got around Rs 6,500 crore in the quarter.

2)  EBITDA margin weakened in all the segments. The overall EBITDA margin weakened to 12.3 percent in the quarter against 13.3 percent a year ago. Infra segment margins were impacted by nearly 230 basis points to 9.2 percent from 11.5 percent a year ago. Hydrocarbon segment margins fell 9.7 percent from 12.5 percent, power segment margins dropped to 5.2 percent from 8.5 percent, heavy engineering 24.7 percent from 29.3 percent, defence engineering margins lost to 23.3 percent from 29.3 percent while development project segments were impacted to 2.4 percent from 8.5 percent a year ago.  The firm said cost headwinds and delayed claim certification in projects and manufacturing businesses impacted EBITDA margin in the quarter.

3) By FY26, L&T targets orders worth Rs 3.4 trillion, up 14 percent from current year, while revenue is expected to grow 15 percent to Rs 2.7 trillion.

4)  L&T said it continues to focus on winning targeted orders in its EPC space, efficient execution of its large order book and capturing the growth momentum in IT & TS portfolio. A robust order book, strong balance sheet, a well-diversified business portfolio and proven execution capabilities enable the company to steer through the current challenging environment while retaining its leadership position.

5) The company under its five year strategic programme "Lakshya 26" plan for pursuing profitable growth in its traditional businesses of EPC Projects and Manufacturing. The firm says it  will look to expand the size and scale of its IT&TS portfolio. The Company will incubate digital offerings in data centers, tech education and B2B e-commerce.  It also has plans to invest in the new areas of green energy. Aggressive plans are on to unlock value of its current investment in few non-core areas such as the concessions space, it added.

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