L&T Q3 profit rises 5% YoY to Rs 2,467 cr on record quarterly order inflow

Larsen and Toubro (L&T) on Monday reported a consolidated net profit of Rs 2,466.71 crore for the October-December quarter of FY21 (Q3FY21), clocking a growth of 4.8 per cent year on year (YoY) on the back of highest-ever order inflow in a quarter. This amount, however, included net profit worth Rs 209.3 crore from the company's discontinued operations.

"Consolidated Profit After Tax (PAT) for the quarter ended December 31, 2020 at Rs 2,467 crore registered growth of 4.9 per cent over the corresponding quarter of the previous year, largely attributed to higher profit from IT a TS segment and sale of commercial property in Realty. PAT also includes gain on divestment of Rs 209 crore from discontinued operations for the quarter ended December 31, 2020," L&T said in its financial statement.
 

India's largest infrastructure, which had clocked a net profit of Rs 2,352.1 crore in the year-ago period, reported a 55.3 per cent decline in PAT on a quarterly basis from Rs 5,520.27 crore reported in Q2FY21.
 

The numbers were better-than-Street expectations. Analyst at Sharekhan, for instance, had expected the PAT to come around Rs 2,118 crore, while those at HDFC Securities had pegged the profit at Rs 1,980 crore.

It's standalone net profit came in at Rs 1,872.77 crore for Q3FY21, compared with a PAT of Rs 6,716.51 crore in Q2FY21 and Rs 1,246 crore in Q3FY20. 
 

Revenue from operations, meanwhile, came in at Rs 35,596.42 crore for the quarter under review, down 1.7 per cent from previous year revenue of Rs 36,242.7 crore. This translated into a 14.6 per cent growth in revenue on quarterly basis from Rs 31,034.7 crore clocked in Q2FY21.

The income missed analysts' expectation who had expected revenue of Rs 39,321.7 crore, up 8.5 per cent YoY. READ ANALYSTS' EXPECTATIONS HERE
 

"The Covid-19 restrictions continued to have an impact on project site execution and Hyderabad metro operations that led to a marginal decline in revenue of 2 per cent over the corresponding quarter of the previous year. International revenue during the quarter at Rs 12,967 crore constituted 36 per cent of the total revenue. The consolidated gross revenue for the nine months period is at Rs 87,891 crore," the management said in a statement.

On the operational front, L&T's earnings before interest, tax, depreciation, and amortisation (Ebitda) rose 3.9 per cent on year at Rs 4,279.8 crore from Rs 4,118 crore reported in Q3FY20. Ebitda margin stood at 12 per cent, a jump of 60 bps YoY.
 

Order Book

During the quarter the company was awarded the biggest EPC contract in the country and first of its kind - the prestigious High Speed Rail order. With this, the Group order inflow for the quarter ended December 31, 2020 registered a strong growth of 76 per cent over the corresponding quarter of the previous year and stood at Rs 73,233 crore.
 

International orders during the quarter constituted 14 per cent of the total order inflow. On a cumulative basis, the order inflow for the nine months period ended December 31, 2020 stood at Rs 124,846 crore. The consolidated order book of the Group stood at a record Rs 331,061 crore as at December 31, 2020, registering a robust growth of 9 per cent over the March'20 level. The international orders constitute 20 per cent of the total order book.

Segment-wise revenue
L&T secured orders worth Rs 45,574 crore, higher by 80 per cent YoY during the quarter ended December 31, 2020, in the Infrastructure segment. The segment recorded customer revenue of Rs 15,828 crore, registering a sequential growth of 22 per cent but down 7 per cent YoY primarily "on account of progress being impacted due to Covid-19 preventive measures". The overall revenue declined 7 per cent as against previous year's income and stood at Rs 15,973.22 crore in Q3FY21.

The Ebitda margin of the segment is at 6.2 per cent for the current quarter as compared to 6.1 per cent for the quarter ended December 31, 2019.

In the Power segment, the company didn't receive any major order and ended the quarter with an order book worth Rs 13,710 crore. The total revenue from the segment came in at Rs 903.7 crore, up 29.4 per cent YoY.
 
"Heavy Engineering Segment secured orders at Rs 998 crore during the quarter, posting nearly a 100 per cent growth on  YoY basis," it said in its statement. The segment recorded customer revenue of Rs 733 crore, with total order book at Rs 3,645 crore at the end of Q3FY21. The total revenue was Rs 803.3 crore, flat YoY.

It's Defence Engineering Segment received orders worth Rs 705 crore during the quarter ended December 31, 2020 which were mainly domestic, registering substantial growth on a low base of the corresponding quarter of the previous year. The order book of the segment stood at Rs 8,795 crore as on December 31, 2020, with export orders constituting 13 per cent. Customer revenue from the segment was Rs 1,022 crore with Ebitda margin at 16.9 per cent. The reported total revenue came in at Rs 1,024 crore, up 2 per cent YoY.

Customer revenue from IT and Financial Services segment stood at Rs 6,505 crore and Rs 3,401 crore, respectively, up/down 7 per cent/4 per cent YoY.

Outlook
The management said the post lockdown pent-up demand, improved prospects in affordable residential real estate, green shoots in Cement and Steel capex outlays, are signs of improved confidence on economic revival. However, significant private sector led capex could continue to remain in wait a watch mode, in the medium term. 

"On the global front, the business sentiments remain cautious as localised repeat outbreaks of the Covid-19 virus and the resultant lockdown continues to hamper sustained economic recovery. The near term outlook features continuing uncertainty

on the trade front between US and China and forecast of subdued oil prices affecting Middle East economies," it said in its forward-looking guidance.

The Company will focus with cautious optimism on large project wins, smart execution of its large order book, and preservation of liquidity and optimum use of capital and other resources, it added. 

Shares of the engineering and construction firm hit a fresh 52-week high of Rs 1,396 apiece on the BSE earlier in the day, but ended 0.12 per cent lower at Rs 1,361.45.