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Larsen & Toubro Limited — Q4 FY25
L&T reported a robust Q1 FY25 with group revenues of ₹55,100 crore (+15% YoY) and PAT of ₹2,800 crore (+12% YoY), driven by strong execution in infrastructure, hydrocarbon, and precision engineering.
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L&T reported a robust Q1 FY25 with group revenues of ₹55,100 crore (+15% YoY) and PAT of ₹2,800 crore (+12% YoY), driven by strong execution in infrastructure, hydrocarbon, and precision engineering. Order inflows grew 8% YoY to ₹70,900 crore, while the order book reached a record ₹4.91 trillion (+19% YoY). The EBITDA margin remained flat at 10.2%, with infrastructure margins improving 70 bps to 5.8% on execution cost savings. Management maintained its FY25 guidance of 10% order inflow growth and 15% revenue growth, despite a 10% drop in the prospects pipeline to ₹9.07 trillion, mainly due to hydrocarbon deferrals. Key risks include skilled labor shortages potentially slowing domestic execution and geopolitical volatility in the Middle East. The company's ROE improved to 14.7% (up 190 bps YoY), with a bridge to the 18% target via metro loss reduction, higher payouts, and margin expansion.
L&T ने पहली तिमाही (Q1 FY25) में मजबूत प्रदर्शन किया। कंपनी की कुल कमाई ₹55,100 करोड़ रही, जो पिछले साल से 15% ज्यादा है। मुनाफा ₹2,800 करोड़ (+12%) हुआ। यह वृद्धि बुनियादी ढांचे, तेल-गैस और इंजीनियरिंग क्षेत्रों में अच्छे काम से आई। नए ऑर्डर 8% बढ़कर ₹70,900 करोड़ हुए, और कुल ऑर्डर बुक ₹4.91 लाख करोड़ के रिकॉर्ड स्तर पर पहुंच गया। कंपनी का मुनाफा मार्जिन 10.2% पर स्थिर रहा, लेकिन बुनियादी ढांचे का मार्जिन लागत बचत से 5.8% हो गया। प्रबंधन ने इस साल 10% ऑर्डर और 15% कमाई वृद्धि का अनुमान बरकरार रखा है। मुख्य जोखिमों में कुशल मजदूरों की कमी और मिडिल ईस्ट में अस्थिरता शामिल है। कंपनी का रिटर्न (ROE) 14.7% हो गया, जो 18% के लक्ष्य की ओर बढ़ रहा है।
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Skilled labor shortage impacting domestic execution
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Order Inflows
₹70,900 crore
+8% YoY
Group order inflows for Q1 FY25, driven by infrastructure, hydrocarbon, and precision engineering.
Order Book
₹4.91 trillion
+19% YoY
Record order book as of June 2024, with 62% domestic and 38% international.
Infrastructure EBITDA Margin
5.8%
+70 bps YoY
Infrastructure segment margin improved due to execution cost savings.
ROE (Trailing 12M)
14.7%
+190 bps YoY
Improved profitability and capital return via buyback boosted ROE.
What Changed vs Last Quarter
UPDATED
Order inflow growth of 10% for FY25
Management reaffirmed the 10% order inflow growth guidance despite a 10% drop in the prospects pipeline, citing a 22-23% conversion rate as achievable.
UPDATED
Revenue growth of 15% for FY25
Group revenue growth guidance of 15% maintained, with domestic execution expected to pick up in H2 after a subdued Q1 due to elections and heat.
UPDATED
P&M margin target of 8.2-8.25% for FY25
Projects & Manufacturing margin guidance maintained; Q1 margins improved 20 bps to 7.6%, with infrastructure margins up 70 bps.
UPDATED
CapEx of ~₹4,000 crore for FY25
Capital expenditure for the year expected to be around ₹4,000 crore, in line with previous guidance.
NEW RISK
Hyderabad Metro losses and debt burden
Hyderabad Metro reported a loss of ₹214 crore in Q1, with a debt of ~₹12,500 crore; government support of ₹2,100 crore is pending.
RISK GONE
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.
🤫 Topics management stopped discussing
Mentioned in Q2 FY24, Q2 FY25, Q3 FY24, Q3 FY25, Q4 FY24
Despite ceasefire, potential trade wars and regional instability could impact project execution and payment flows.
Mentioned in Q1 FY25, Q2 FY25, Q3 FY24
Large hydrocarbon projects in the Middle East are fixed-price; any delay could compress margins.
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 Q2 FY25, Q3 FY25
Improved from 16.6% in Dec 2023; management expects to sustain this level, better than the earlier 15% guidance.
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Guidance and risk preview
Management reaffirmed the 10% order inflow growth guidance despite a 10% drop in the prospects pipeline, citing a 22-23% conversion rate as achieva...
Management highlighted that skilled labor shortages could slow infrastructure progress in India, exacerbated by elections and heat in Q1.
View Risks →