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Larsen & Toubro Limited — Q1 FY25
L&T delivered a robust Q1 FY25 with group revenues of INR 55,100 crore (+15% YoY) and PAT of INR 2,800 crore (+12% YoY), driven by strong execution in Infrastructure (+22% YoY) and Hydrocarbon (+27% YoY).
bullish
high
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L&T delivered a robust Q1 FY25 with group revenues of INR 55,100 crore (+15% YoY) and PAT of INR 2,800 crore (+12% YoY), driven by strong execution in Infrastructure (+22% YoY) and Hydrocarbon (+27% YoY). Order inflows grew 8% YoY to INR 70,900 crore, with international orders at 40% of the mix. The order book reached a record INR 4.91 trillion (+19% YoY), providing 3x revenue visibility. Management maintained its FY25 guidance of 10% order inflow growth and P&M margin of 8.2-8.25%, despite a 10% drop in the prospects pipeline to INR 9.07 trillion due to hydrocarbon deferrals. Key risks include skilled labor shortages impacting domestic execution and geopolitical volatility in the Middle East.
L&T ने पहली तिमाही (अप्रैल-जून 2024) में शानदार प्रदर्शन किया। कंपनी की कुल कमाई ₹55,100 करोड़ रही, जो पिछले साल से 15% ज़्यादा है। मुनाफा ₹2,800 करोड़ (+12%) हुआ। इसकी वजह इंफ्रास्ट्रक्चर (+22%) और हाइड्रोकार्बन (+27%) कारोबार में तेज़ी है। नए ऑर्डर ₹70,900 करोड़ (+8%) मिले, जिनमें 40% अंतरराष्ट्रीय ऑर्डर हैं। कुल ऑर्डर बुक ₹4.91 लाख करोड़ का रिकॉर्ड स्तर पर पहुंच गया, जो पिछले साल से 19% ज़्यादा है। इससे कंपनी को अगले 3 साल का काम मिल गया है। प्रबंधन ने इस साल 10% ऑर्डर वृद्धि और 8.2-8.25% मार्जिन का अनुमान बरकरार रखा है। हालांकि, कुशल मजदूरों की कमी और मिडिल ईस्ट में अस्थिरता जोखिम हैं।
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Order Inflows
INR 70,900 crore
+8% YoY
Group order inflows for Q1 FY25, driven by Infrastructure, Hydrocarbon, and Precision Engineering.
Order Book
INR 4.91 trillion
+19% YoY
Record order book as of June 2024, with 62% domestic and 38% international.
Infrastructure Revenue Growth
INR 26,900 crore
+22% YoY
Strong execution in Infrastructure segment, aided by international projects.
Prospects Pipeline
INR 9.07 trillion
-10% YoY
Drop in prospects due to hydrocarbon deferrals; management confident of 22-23% conversion to meet guidance.
What Changed vs Last Quarter
NEW
P&M margin target of 8.2-8.25% for FY25
Management maintained the P&M margin guidance of 8.2-8.25% for FY25, with Q1 margins at 7.6% (up 20 bps YoY).
NEW
CapEx of around INR 4,000 crore for FY25
Management guided for CapEx of approximately INR 4,000 crore for FY25.
UPDATED
Order inflow growth of 10% for FY25
Management reaffirmed the 10% order inflow growth guidance for FY25, despite a 10% drop in the prospects pipeline, citing a 22-23% conversion rate.
UPDATED
Group revenue growth of 15% for FY25
Management reiterated the 15% group revenue growth guidance, with H2 expected to be stronger due to domestic execution ramp-up.
DROPPED
P&M margin around 8.25% in FY25
Projects & Manufacturing margin expected to be similar to FY24's 8.25%, with mix and competitive pressures offset by volume growth.
NEW RISK
Skilled labor shortage
Management highlighted that skilled labor shortages could slow infrastructure execution, especially as India's CapEx cycle expands.
NEW RISK
Hydrocarbon prospects pipeline decline
The prospects pipeline dropped 10% YoY, primarily due to hydrocarbon project deferrals and losses, which could impact future order inflows.
NEW RISK
Geopolitical and commodity price volatility
Management noted that geopolitical conflicts, supply chain disruptions, and commodity price volatility remain headwinds, particularly in the Middle East.
NEW RISK
Execution risk in international fixed-price contracts
International projects are largely fixed-price; any cost overruns or delays could pressure margins, though management expressed confidence in timely execution.
RISK GONE
Geopolitical uncertainty in Middle East
Escalation of West Asia conflict could disrupt supply chains and delay project awards, impacting order inflow guidance.
RISK GONE
Domestic election-related slowdown
H1 FY25 may see softness in tendering and awarding due to general elections and new government formation.
RISK GONE
Margin pressure from competitive bidding and input costs
Analyst raised concern about margin guidance being lowered; management cited mix shift, delayed claims, and higher labor/logistics costs.
RISK GONE
Hyderabad Metro recovery delayed
Free bus scheme for women reduced ridership by 40k; government grants and monetization progress slower than expected.
🤫 Topics management stopped discussing
Mentioned in Q2 FY24, Q3 FY24, Q4 FY24
Escalation of West Asia conflict could disrupt supply chains and delay project awards, impacting order inflow guidance.
Mentioned in Q1 FY24, Q3 FY24, Q4 FY24
Working capital intensity expected to increase from 12% to 15% as legacy collections normalize.
Mentioned in Q2 FY24, Q4 FY24
Projects & Manufacturing margin expected to be similar to FY24's 8.25%, with mix and competitive pressures offset by volume growth.
Mentioned in Q1 FY24, Q3 FY24
Trimmed from earlier 8.5%-9% band due to postponement of margin recognition on new jobs into FY25.
Fast read
Guidance and risk preview
Management reaffirmed the 10% order inflow growth guidance for FY25, despite a 10% drop in the prospects pipeline, citing a 22-23% conversion rate.
Management highlighted that skilled labor shortages could slow infrastructure execution, especially as India's CapEx cycle expands.
View Risks →