Larsen & Toubro (LT) Q2 24/25 earnings summary

Executive summary

• Q2 FY25 revenue grew 21% YoY to ₹616 billion, driven by strong execution in core and international businesses, with 52% of revenue from overseas markets.

• Order inflow for Q2 FY25 was ₹800 billion, up 13% sequentially but down 10% YoY due to a high base last year; order book reached a record ₹5.1 trillion, up 13% YoY, with 40% international share.

• PAT for Q2 FY25 was ₹34 billion, up 5% YoY; excluding last year's one-off, PAT grew 25%.

• Net working capital to revenue improved to 12.2% from 16.7% YoY; ROE improved to 16.1%, up 80 bps YoY.

• Strategic focus on renewables, green energy, semiconductors, and data centers, with new verticals and partnerships.

Financial highlights

• Q2 FY25 revenue at ₹616 billion (+21% YoY); H1 FY25 revenue at ₹1,167 billion (+18% YoY); international revenues made up 52%.

• Q2 FY25 PAT at ₹34 billion (+5% YoY); H1 FY25 PAT at ₹62 billion (+8% YoY); EPS for Q2 FY25: ₹24.69 (basic).

• EBITDA margin for Q2 FY25 at 10.3% (vs 11% YoY), impacted by absence of last year's non-recurring Hyderabad Metro gain.

• Cash flow from operations more than doubled YoY to ₹77 billion; free cash flow and net working capital to sales improved to 12.2%.

• ROE (TTM) at 16.1%, up from 15.3% YoY.

Outlook and guidance

• Maintains FY25 guidance: 10% order inflow growth, 15% revenue growth, P&M margin at FY24 levels, NWC/revenue at 15% by March 2025.

• Healthy order prospects pipeline of ₹8.1 trillion, with 57% domestic share.

• Expects stronger H2 domestic order inflows as election-related slowdown abates; positive on public and private CapEx, with healthy project pipeline in infrastructure and energy.

• Continued capex momentum in India and GCC, with focus on energy transition and new age sectors.

• Capital allocation targeted towards growth sectors and return of excess cash to shareholders.