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(1/16)
• About
Larsen & Toubro was founded by two Danish engineers, Henning Holk Larsen and Soren Kristian Toubro, in Mumbai. The company was incorporated in 1946 and was listed in 1950.
L&T is the largest player in the infrastructure sector, with a market cap of ₹3L Cr.
• About
Larsen & Toubro was founded by two Danish engineers, Henning Holk Larsen and Soren Kristian Toubro, in Mumbai. The company was incorporated in 1946 and was listed in 1950.
L&T is the largest player in the infrastructure sector, with a market cap of ₹3L Cr.
(2/16)
• Sector Overview
In the budget It was announced the creation of the New Infrastructure Finance Secretariat which would increase private infrastructure opportunities. States & local govt have are also implementing various initiatives to make cities more sustainable.
• Sector Overview
In the budget It was announced the creation of the New Infrastructure Finance Secretariat which would increase private infrastructure opportunities. States & local govt have are also implementing various initiatives to make cities more sustainable.
(3/16)
• Outlook:
PLI schemes by government are expected to incentivise domestic and international private players to set up manufacturing facilities. Trade disruptions are expected to continue due to the Russia-Ukraine conflict.
• Outlook:
PLI schemes by government are expected to incentivise domestic and international private players to set up manufacturing facilities. Trade disruptions are expected to continue due to the Russia-Ukraine conflict.
(4/16)
• Company’s business
Larsen & Toubro has operations across 50 countries and their manufacturing footprint is in 9 countries.
• Company’s business
Larsen & Toubro has operations across 50 countries and their manufacturing footprint is in 9 countries.
(5/16)
• About the segments
Larsen & Toubro has their presence in the following segments:
•Infrastructure
•Energy
•IT & TS
•Financial Services
•Hi-Tech Manufacturing
•Development
•Others
• About the segments
Larsen & Toubro has their presence in the following segments:
•Infrastructure
•Energy
•IT & TS
•Financial Services
•Hi-Tech Manufacturing
•Development
•Others
(6/16)
• Q3 Numbers
Revenue up from ₹42,763 Cr in Q2 to ₹46,390 Cr in Q3
OPM fell from 15% to 14%
NPAT up from 2785 Cr to 3058 Cr
EPS up from ₹15.86 to ₹18.17
• Q3 Numbers
Revenue up from ₹42,763 Cr in Q2 to ₹46,390 Cr in Q3
OPM fell from 15% to 14%
NPAT up from 2785 Cr to 3058 Cr
EPS up from ₹15.86 to ₹18.17
(7/16)
• Key Highlights:
As of 31st December 2022, their order book stands at ₹3,866Bn with 72% from the infrastructure segment, 19% from energy, 5% from Hi-Tech Manufacturing & 4% from Others
IT & Technology services segment saw a revenue growth of 25% compared to Q3 FY22
• Key Highlights:
As of 31st December 2022, their order book stands at ₹3,866Bn with 72% from the infrastructure segment, 19% from energy, 5% from Hi-Tech Manufacturing & 4% from Others
IT & Technology services segment saw a revenue growth of 25% compared to Q3 FY22
(8/16)
Of the ₹464Bn generated in Q3, the largest proportion was from infrastructure - 47% and 63% of the revenue was generated domestically
Infrastructure margins took a hit due to inflationary period and execution of projects that involved project costs absorption.
Of the ₹464Bn generated in Q3, the largest proportion was from infrastructure - 47% and 63% of the revenue was generated domestically
Infrastructure margins took a hit due to inflationary period and execution of projects that involved project costs absorption.
(9/16)
Development projects segment saw improved margins and majority of the revenue in this segment has been contributed by Nabha Power. Higher PLF in Nabha and ridership in Hyderabad metro, contributed to the growth.
Domestic award to tender ratio was soft, 56% in Q3 FY23
Development projects segment saw improved margins and majority of the revenue in this segment has been contributed by Nabha Power. Higher PLF in Nabha and ridership in Hyderabad metro, contributed to the growth.
Domestic award to tender ratio was soft, 56% in Q3 FY23
(10/16)
Net investment in fixed assets up from ₹18Bn in 9M FY22 to ₹30.3Bn in 9M FY23.
Set up a commissioned pilot green hydrogen plant by spending ₹35Cr during Q2 & Q3 FY23, are now looking for a JV partner who can help set up electrolyzer JV. Expected to complete by March
Net investment in fixed assets up from ₹18Bn in 9M FY22 to ₹30.3Bn in 9M FY23.
Set up a commissioned pilot green hydrogen plant by spending ₹35Cr during Q2 & Q3 FY23, are now looking for a JV partner who can help set up electrolyzer JV. Expected to complete by March
(11/16)
• Key Strengths:
FIIs have increased holdings QoQ
Multiple order wins in Heavy Engineering
Cost savings & efficiency saw margin improvement in Energy projects
Expect higher public Capex spend of Center, States and PSU
• Key Strengths:
FIIs have increased holdings QoQ
Multiple order wins in Heavy Engineering
Cost savings & efficiency saw margin improvement in Energy projects
Expect higher public Capex spend of Center, States and PSU
(12/16)
Order prospects pipeline for Q4 is at ₹4.87Tr, which is public sector/ government led
Improved working capital to sales ratio; from 22.9% in December 2021 to 19% in December 2022
Improved D/E ratio & ROE
Tendering momentum at ₹4.21Tr for Q3 FY23 up by 54% YoY basis.
Order prospects pipeline for Q4 is at ₹4.87Tr, which is public sector/ government led
Improved working capital to sales ratio; from 22.9% in December 2021 to 19% in December 2022
Improved D/E ratio & ROE
Tendering momentum at ₹4.21Tr for Q3 FY23 up by 54% YoY basis.
(13/16)
• Weakness:
Staff costs have gone up by 25% YoY due to salary hikes
Defence segment orders remained subdued in Q3
Insider selling in Q3
Margin pressure of 30 to 50 basis points expected for the current year due to war in Europe and COVID disruptions in China
• Weakness:
Staff costs have gone up by 25% YoY due to salary hikes
Defence segment orders remained subdued in Q3
Insider selling in Q3
Margin pressure of 30 to 50 basis points expected for the current year due to war in Europe and COVID disruptions in China
(14/16)
• Numbers and Ratios
Market Cap: ₹310,131 Cr.
Stock P/E: 30.9
RoCE: 11%
RoE: 4.66%
PEG: 10.2
Price to Sales: 1.74
Int Coverage: 3.71
NPM: 6.42%
D/E: 1.58
• Numbers and Ratios
Market Cap: ₹310,131 Cr.
Stock P/E: 30.9
RoCE: 11%
RoE: 4.66%
PEG: 10.2
Price to Sales: 1.74
Int Coverage: 3.71
NPM: 6.42%
D/E: 1.58
(15/16)
• Shareholding Pattern
FII: 23.29%
DII: 39.76%
Public: 36.7%
Government: 0.23%
• Shareholding Pattern
FII: 23.29%
DII: 39.76%
Public: 36.7%
Government: 0.23%
(16/16)
• Conclusion:
Margins are said to have bottomed out & can be expected to improve from the next quarter as long as there are no further shocks to commodity prices. With a robust order book & and assistance from the state govt, we can expect improved performance.
• Conclusion:
Margins are said to have bottomed out & can be expected to improve from the next quarter as long as there are no further shocks to commodity prices. With a robust order book & and assistance from the state govt, we can expect improved performance.
• • •
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