L&T Records Best Ever Quarterly Order Inflow in Q2, Expects Margins to Normalize
Larsen & Toubro (L&T), a major construction company, has reported its best ever quarterly order inflow in Q2 at ₹89,153 crore, marking a significant 72% year-on-year growth. The company also stated that the prospect pipeline for the next 6-12 months is encouraging.
In terms of financial performance, L&T’s net profit for the second quarter increased by 45% to ₹3,223 crore, compared to ₹2,229 crore in the same quarter last year. Additionally, its revenue from operations grew by 19% to ₹51,024 crore in Q2 FY24, compared to ₹42,763 crore in Q2 FY23.
S N Subrahmanyan, the CMD of L&T, expressed his satisfaction with the company’s performance, stating, “During the quarter, we have received the highest ever order inflows in the history of the company. The company now tops the list of international EPC contractors working in the MENA region in terms of value for projects under execution.”
R Shankar Raman, the CFO of L&T, also voiced optimism about the future, stating that the prospect pipeline for the next 6-12 months is encouraging. He further added, “It’s likely that we will outperform the order inflow and revenue guidance for FY24, depending on H1 performance.”
L&T had initially expected a 10-12% growth in order intake for FY24, along with a revenue growth of 12-15%. As of September 30, 2023, the company’s consolidated order book stands at ₹4.5 lakh crore, with 35% of the orders coming from international markets.
Though a significant portion of the second quarter’s order inflow comes from the Middle East, particularly Saudi Arabia, the ongoing conflict between Israel and Hamas is not expected to have a significant impact on the execution or progress of L&T’s projects. Raman assured that the company is returning to normalcy after the supply chain constraints seen during the COVID-19 pandemic.
While L&T’s earnings before interest tax depreciation and amortization (EBITDA) grew by 15% for the quarter, its EBIDTA margins declined from 11.4% to 11% year-on-year. The infrastructure segment experienced a 1.1% YoY decrease in EBITDA margins, primarily due to rising input costs for pre-COVID legacy contracts. However, Raman expects these margins to normalize in the subsequent quarters as the projects near completion.
L&T remains confident in its performance and prospects for the future, aiming to surpass the FY24 guidance and achieve continued growth and success in the industry.
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