L&T Q4 consolidated net profit up 3% to Rs 3,293 crore on higher revenues

All verticals posted YoY increase in revenue, while most saw profits grow

India’s largest engineering and construction firm Lar­sen & Toubro (L&T) on Friday reported a consolidated net profit of Rs 3,293 crore for Q4, up 3 per cent year-on-year (YoY) on higher revenues and surge in other income.
 
The reported net profit was higher than Bloomberg consensus estimate of Rs 3,042 crore, des­pite the 116 per cent YoY jump in tax expenses to Rs 2,087 crore. In Q4, net sales at Rs 48,088 crore, up 8.7 per cent YoY, were slightly lower than expectations of Rs 48,602 crore. Sequentially, revenues jumped 35 per cent. “The revenue gro­wth on a YoY basis was evid­encing ret­urn to pre Covid levels of activity. The international revenues at Rs 15,851 crore constituted 33 per cent of the total revenue,” L&T said in its release. The order inflow or new orders received during Q4 stood at Rs 50,651 crore, down 12 per cent YoY with deferment of awards. Sectors such as factories, hydel and tunnel, met­ros, special bridges, nucl­ear power, rural water, renewable energy, hyd­ro­carbon offshore and minerals and metal sector contributed significantly to the orders during the quarter.
 
International orders at Rs 18,439 crore is at 36 per cent of total order inflow, with receipt of the biggest Solar PV pla­nt order and transmission line orders, said the company.
 
Among business verticals, the infrastructure and IT & technology services contributed the most in Q4 in terms of revenue at Rs 26,437 crore and Rs 6,845 crore, respectively. ITTS posted a strong 33.5 per cent jump in profit. All verticals posted YoY increase in revenue, while most (barring power and developmental projects) saw profits grow.

 
The group’s Ebitda (excluding other income) at Rs 6,390 crore, up 25 per cent from the same period last year.
 
For the year ended March 31, 2021 (FY21), consolidated revenue from continuing operations at Rs 1.35,979 crore was down 6.5 per cent YoY, due to loss on account of lockdown related disruptions in the first half of FY21 along with new norms of social distancing, etc. Supply chain disruptions imp­acting project execution progress, though with declining severity, throughout the year also hurt the top line at group level, informed the company. L&T received orders worth Rs 175,497 crore at the group level in FY21, down 6 per cent YoY in the face of Covid-19 disrupted business environment in the first half.
 
Going ahead, the management remains cautiously optimistic and is of the view that revenue growth environment would improve upto low-to-mid teens, and margins could remain stable at FY21 levels. It had given no guidance of any kind in the preceding quarter.
 
“Assuming that second wave of Covid-19 will be done in the next couple of months and not taken into consideration the third-wave to avoid any speculation, we see a growth environment for FY22 over FY21,” said R Shankar Raman, chief financial officer at L&T in an earnings call.
 
With regard to migration issues amid ongoing second wave, in March the company did have a labour force of 245,000 but some have gone back to their states and have not returned. In a bid to mitigate migration, L&T is making efforts to convince workers regarding their safety.