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A source-linked quarter view: reported numbers, management language, guidance, and the risks that should carry forward.
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Revenue
₹51,024 Cr
verified against source
Revenue YoY
19%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
L&T reported a robust Q2 FY24 with group revenue of ₹51,000 crore (+19% YoY) and PAT of ₹3,200 crore (+45% YoY), driven by strong execution in projects & manufacturing and a one-time gain from Hyderabad Metro TOD monetization. Order inflows surged 72% YoY to ₹892 billion, led by two ultra-mega hydrocarbon orders in the Middle East. The order book reached a record ₹4.5 trillion (+22% YoY). However, EBITDA margin contracted 40bps to 11% due to legacy EPC job pressures. Management revised FY24 P&M margin guidance down to 8.5%-9% (from 9%) due to delayed margin recognition on new jobs, but expects outperformance on revenue and order inflow guidance. Key risk: geopolitical tensions in the Middle East could disrupt the robust international order pipeline.
Colored figures show movement against the previous available record.
Guidance to track
- Management expects to exceed the initial FY24 guidance of 10-12% order inflow growth and 12-15% revenue growth, but keeps guidance open-ended due to geopolitical uncertainties.
- Projects & manufacturing EBITDA margin for FY24 is now expected in the range of 8.5%-9%, down from the initial 9% guidance, due to delayed margin recognition on new jobs.
- Net working capital to revenue ratio for FY24 is expected to remain in the 16%-18% range, supported by continued focus on collections.
- Management expects margins in the projects & manufacturing portfolio to improve from the next financial year onwards, as legacy jobs conclude and new jobs ramp up.
Risks flagged
- The ongoing conflict in the Middle East could disrupt oil prices and project awards, impacting L&T's large international order pipeline (84% of international order book in Saudi Arabia).
- Legacy COVID-impacted jobs are compressing infrastructure margins (5.4% in Q2 vs 6.6% YoY). Management expects these to conclude by FY24 end, but any delay could further pressure margins.
- Analysts questioned the margin profile of the two ultra-mega hydrocarbon orders. Management acknowledged they are fixed-price contracts and declined to provide margin expectations, raising uncertainty.
- While management downplayed current labor shortages, they admitted that securing skilled labor for complex projects (coastal roads, high-speed rail, underground metro) is becoming challenging.
Key quotes
- We are indeed off to a good start in H1, the current year, both in terms of orders secured and the revenues achieved during this period.
- It would be a fallacy to assume that a large part of orders coming from international orders can have an adverse impact on the margin trajectory.
- The company will pursue its stated objective of demonstrating profitable growth with judicious use of capital and improve shareholder value on a sustained basis.
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