Larsen & Toubro slips 2% post December quarter results

The company bagged orders worth Rs 50,359 crore during Q3, down 31% YoY, as the previous year had the benefit of the company securing its biggest ever EPC contract for Mumbai Ahmedabad High Speed Rail

Shares of Larsen & Toubro (L&T) slipped 2.5 per cent to Rs 1,851 on the BSE in Monday’s intra-day trade after the company reported a 17 per cent year-on-year (YoY) decline in consolidated net profit at Rs 2,055 crore for the December quarter (Q3) as high raw material costs ate into the bottom line even as net sales rose.

The stock of the country’s largest infrastructure company traded lower for the third straight day, down 4 per cent during the period. It had hit a record high of Rs 2,078 on January 18, 2022. At 09:37 am; L&T erased its entire intra-day losses and traded flat at Rs 1,899, as compared to 1.3 per cent rise in the S&P BSE Sensex.

In Q3, L&T’s revenue grew 11 per cent YoY to Rs 39,563 crore, with the infrastructure segment contributing the highest followed by IT & technology services and the hydrocarbon business.

On a standalone basis, infrastructure segment revenue grew by 18 per cent to Rs 17,838 crore on YoY basis. Standalone earnings before interest tax and depreciation and amortization (EBITDA) declined by 7.7 per cent YoY to Rs 1,721 crore with margins down 152 bps to 8 per cent on YoY basis. Standalone adjusted profit after tax declined 2 per cent YoY at Rs 1,671 crore.

The company bagged orders worth Rs 50,359 crore during Q3, in the process registered a decline of 31 per cent YoY, as the previous year, as in the previous year the company had the benefit of securing its biggest ever EPC contract for Mumbai Ahmedabad High Speed Rail in the Infrastructure segment, L&T said in press release.

On a cumulative basis, the order inflow for the nine month ended December 31, 2021 stood at Rs 1.19 trillion, registered decline of 5 per cent over the corresponding period of the previous year. The consolidated order book of the group was at Rs 3.40 trillion as on December 31, 2021, at record levels, with international orders having a share of 24 per cent, the company said.

“We believe the company is poised for a strong earnings growth momentum, if and when order inflow gains momentum. It has some more asset monetization opportunities to capitalize on, including the sale of Nabha Power, a stake sale in L&T IDPL, and monetization of the Hyderabad Metro”, Motilal Oswal Financial Services said in result update.