Larsen & Toubro (LT) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw robust performance with group order inflows up 8% to ₹709 bn, revenues up 15% to ₹551 bn, and PAT up 12% to ₹28 bn year-over-year, driven by improved execution in Projects & Manufacturing and strong international contribution.

• International business contributed 48% of revenues and 38% of the order book, with strong momentum in the Middle East.

• Order book reached ₹4,909 bn (INR 4.91 trillion), up 19% year-over-year, with 62% domestic and 38% international share.

• S&P and Fitch assigned BBB+ ratings, and MSCI ESG rating improved from BB to BBB.

• Stake sale in L&T Infrastructure Development Projects completed in April 2024.

Financial highlights

• Group revenues for Q1 FY25 at ₹551 bn, up 15% year-over-year; EBITDA at ₹56.2 bn, margin at 10.2% (flat YoY).

• PAT at ₹28 bn, up 12% year-over-year; basic EPS at ₹20.26.

• Working capital to revenue at 13.9%, improved from 17% YoY.

• Cash flow from operations at ₹(5.0) bn, improved from ₹(9.9) bn in Q1 FY24.

• Net decrease in cash and bank balances of ₹20.1 bn in Q1 FY25.

Outlook and guidance

• Maintains 10% order inflow growth guidance for FY25 despite a 10% drop in order prospects pipeline, mainly in hydrocarbons.

• Revenue growth guidance at 15% for FY25, with stronger H2 expected for domestic execution.

• Margin guidance for projects and manufacturing at 8.2%-8.25% for FY25.

• ROE target of 18% by FY26, with improvement expected from Hyderabad Metro loss reduction, higher payouts, and margin gains.

• Order prospects pipeline stands at ₹9.1 trillion in the near term.