25 Jul 2022 , 12:50 PM
Result date: 26th July, 2022
Recommendation: Buy
Target price: Rs1,799
Source: IIFL Research
Larsen & Toubro (L&T) is set to post a mixed set of results for the June 2022 quarter. While growth is likely to be strong on a year-on-year basis, sequentially revenue, EBITDA as well as Profit After Tax (PAT) are likely to decline.
A solid order book could aid performance of the core E&C segment during the quarter, driving overall topline of the company. Key segments driving momentum in order book include railway, hydrocarbon, power T&D, water treatment, heavy engineering and buildings & factories. The services business is also expected to continue its healthy run.
Strength in topline and better execution of orders could trickle down to EBITDA which could grow 17.8% over the year-ago quarter. Rising input costs, particularly in fixed price contracts is a key pressure point.
Lower interest expense and tax outgo could aid Profit After Tax (PAT) which could grow 42.8% over the year-ago quarter.
Important management insights to watch out for:
· Update on new orders and execution across all key segments
· Trends in working capital and cash flow management
· Outlook on margins
Rs. Million | June 2022 estimates | YoY change | QoQ change |
Revenue | 343,826 | 17.2% | (34.9)% |
EBITDA | 37,375 | 17.8% | (41.8)% |
Profit After Tax | 16,771 | 42.8% | (53.7)% |
Source: Brokerage reports
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