Q3FY24 Preview: Larsen & Toubro: Revenue seen at ₹541,764 Million, PAT at ₹26,049 Million

29 Jan 2024 , 10:46 AM

Result date: January 30, 2024

Recommendation: Buy

Target price: ₹3,940

Analysts at IIFL Capital Services believe Larsen & Toubro (L&T) could post revenue (Ex-services) of ₹385 Billion during the December quarter, a growth of 23% over the year-ago quarter. This will be led by 24% growth in Infrastructure, while Hydrocarbon/Heavy engineering are expected to grow 20%/10%, respectively, relative to the year-ago quarter.

Order inflows (ex-services) could be robust at ₹480 Billion (up 5% over the year-ago quarter but down 34% sequentially), led by large orders in HC & infra (especially T&D & Civil Infra). Sequential decline can be largely attributed to a high base of mega wins in the September 2023 quarter.

L&T’s EBIT margins (ex-services) are pegged at 6.4% (down 99 basis points YoY, up 21 basis points QoQ). Infra segment’s EBIT margins could improve 90 basis points sequentially to 5.0% (down 90 basis points over the year-ago quarter). 

The company’s Profit After Tax or PAT could grow 8% over the year-ago quarter.

Important management insights to watch out for:

• Growth outlook across all business segments
• Outlook on margins

₹ Million	December 2023 estimates	YoY change
Revenue	541,764	17%
EBITDA	51400	1%
Profit After Tax	26049	8%
Order Inflows	637,268	5%
Order Book	4,602,844	19%

Source: IIFL Research