Larsen & Toubro Ltd (Q3 FY14)
India Infoline News Service | Mumbai |
LT’s topline of Rs143.8bn was higher by 11.8% yoy, marginally higher than our estimate of 11% yoy growth.
CMP Rs1,004, Target Rs1,137, Upside 13.2%
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LT managed to register strong numbers on all fronts during the quarter
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Order inflow continued to remain strong at Rs217bn, up by 21% yoy and is higher by 23% yoy to Rs674bn in 9M FY14
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Standalone revenue of Rs143bn was in line with our estimate on the back of strong execution in the infrastructure segment
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Operating margin for the company expanded by 186bps yoy on the back of improved performance by the infrastructure segment and lower losses in ship building and forex
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Management has indicated that Q4 FY14 would be a challenging quarter due to upcoming elections and indicated on missing its full year guidance
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Infrastructure segment to boost earnings; Upgrade to BUY with a revised price target of Rs1,137
| (Rs mn) |
Q3 FY14 |
Q3 FY13 |
% yoy |
Q2 FY14 |
% qoq |
| Net sales |
143,875 |
128,693 |
11.8 |
123,084 |
16.9 |
| Material costs |
(67,967) |
(58,092) |
17.0 |
(50,905) |
33.5 |
| Sub-contracting charges |
(34,101) |
(35,720) |
(4.5) |
(29,348) |
16.2 |
| Personnel costs |
(10,682) |
(9,268) |
15.3 |
(13,753) |
(22.3) |
| Other overheads |
(14,378) |
(13,032) |
10.3 |
(17,221) |
(16.5) |
| Operating profit |
16,748 |
12,583 |
33.1 |
11,857 |
41.3 |
| OPM (%) |
11.6 |
9.8 |
186 bps |
9.6 |
201 bps |
| Depreciation |
(1,992) |
(1,779) |
12.0 |
(1,926) |
3.4 |
| Interest |
(2,909) |
(2,338) |
24.4 |
(2,379) |
22.3 |
| Other income |
4,468 |
5,595 |
(20.1) |
4,656 |
(4.0) |
| PBT |
16,316 |
14,061 |
16.0 |
12,208 |
33.7 |
| Tax |
(4,953) |
(3,929) |
26.1 |
(3,562) |
39.1 |
| Effective tax rate (%) |
30.4 |
27.9 |
|
29.2 |
|
| Adjusted PAT |
11,363 |
10,132 |
12.1 |
8,646 |
31.4 |
| Adj. PAT margin (%) |
7.9 |
7.9 |
2 bps |
7.0 |
87 bps |
| Extra ordinary items |
1,044 |
- |
- |
- |
- |
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***Note: This is a
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