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

Executive summary

• Q1 FY25 saw robust growth with 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 strong execution in Projects & Manufacturing.

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

• The consolidated order book reached ₹4.91 trillion, up 19% year-over-year, with 62% domestic and 38% international share.

• S&P and Fitch assigned BBB+ ratings (two notches above sovereign), and MSCI ESG rating improved from BB to BBB.

• Completed stake sale in L&T Infrastructure Development Projects and acquired SiliConch Systems for semiconductor expansion.

Financial highlights

• Group order inflows: ₹709 bn, up 8% year-over-year; order book: ₹4,909 bn, up 19% year-over-year.

• Group revenues: ₹551 bn, up 15% year-over-year; international revenues at 48%.

• EBITDA margin (excl. other income): 10.2%, flat year-over-year; EBITDA ₹56.2 bn, up 15% year-over-year.

• Consolidated PAT: ₹28 bn, up 12% year-over-year; ROE (TTM): 14.7%, up 190 bps year-over-year.

• NWC to sales ratio: 13.9% in June 2024, improved from 17% year-over-year.

Outlook and guidance

• Maintains 10% order inflow growth and 15% revenue growth guidance for FY25.

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

• Domestic CapEx momentum expected to remain strong, aided by policy continuity and government focus on infrastructure.

• Cautious on skilled labor shortages and potential execution slowdowns in infrastructure.

• International execution expected to remain stable barring unforeseen geopolitical events.