OTHER GROUP COMPANIES
market

Larsen & Toubro Ltd (Q1 FY14)

LT’s topline of Rs125.5bn was higher by 5% yoy, but quite lower than our estimate of Rs137bn.

January 01, 1970 5:30 IST | India Infoline News Service
CMP Rs902, Target Rs970, Upside 7.5%

  • Q1 FY14 order inflow of Rs251.2bn increased 28% yoy and was quite higher than our estimate

  • Standalone revenue of Rs125.5bn was lower than our estimate of Rs137bn due to slow execution in power and metals sector

  • Operating margin for the company shrunk by 56bps yoy leading to a 1.4% yoy decline in operating profit

  • Margins for the Hydrocarbon division shrunk sharply by 250bps due to pricing pressure and higher share of exports

  • Management has maintained its guidance of 15-17% yoy growth in revenue and 20% growth in order inflow for FY14

  • Margin pressure and execution risks to keep earnings in check; Maintain our Market Performer rating with a price target of Rs970

Result table (Standalone)
(Rs mn)
Q1 FY14
Q1 FY13
% yoy
Q4 FY13
% qoq
Net sales
125,551
119,554
5.0
202,938
(38.1)
Material costs
(49,310)
(57,993)
(15.0)
(99,225)
(50.3)
Sub-contracting charges
(35,562)
(24,905)
42.8
(48,365)
(26.5)
Personnel costs
(11,688)
(9,474)
23.4
(11,344)
3.0
Other overheads
(18,277)
(16,311)
12.1
(19,495)
(6.3)
Operating profit
10,715
10,870
(1.4)
24,509
(56.3)
OPM (%)
8.5
9.1
(56) bps
12.1
(354) bps
Depreciation
(2,103)
(1,919)
9.6
(2,222)
(5.4)
Interest
(2,453)
(2,284)
7.4
(2,810)
(12.7)
Other income
4,726
6,058
(22.0)
3,744
26.2
PBT
10,885
12,725
(14.5)
23,220
(53.1)
Tax
(3,325)
(3,705)
(10.3)
(5,528)
(39.9)
Effective tax rate (%)
30.5
29.1

23.8

Adjusted PAT
7,560
9,020
(16.2)
17,692
(57.3)
Adj. PAT margin (%)
6.0
7.5
(152) bps
8.7
(270) bps
Extra ordinary items
-
(383)
-
187

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