Q4FY23 Preview: Larsen & Toubro: Revenue seen at Rs. 596,213 million, PAT at Rs. 38,301 million

9 May 2023 , 10:03 AM

Result date: 10^th May, 2023

Recommendation: Buy

Target price: Rs. 2,518

Larsen & Toubro (L&T) could witness 10% growth in core revenue (excluding services) over the year-ago quarter, led by 11% YoY growth in the HC segment. Analysts at IIFL Capital Services expect the company’s Infra/Defence segments to grow by 6%/28% respectively over the year-ago quarter. FY23 sales growth could come in at 17%, which is ahead of management guidance.

EBIT margin (ex-Services) is pegged at 9.6% (up 10 basis points YoY). Infrastructure segment margins at 8.2% (down 20 basis points YoY), Other segment margin at 23.8% (up 5pps YoY)

Inflows (ex-Services) are seen at Rs. 520 billion (down 15% YoY/up 14% QoQ)/ up13% for FY23; overall order book is estimated at Rs. 3,944 billion, up 10% YoY.

The company’s Profit After Tax or PAT could increase 6% over the year-ago quarter and could be impacted by flat operating margins and lower treasury income.

	March 2023 estimates	YoY change	QoQ change
Revenue (Rs. mn)	596,213	13%	29%
Operating Profit margin (%)	12.5%	14 bps	154 bps
Profit After Tax (Rs. mn)	38,301	6%	58%
Inflows (excluding-services)	520,509	(15)%	14%
Order book (Rs. mn)	3,944,842	10%	2%

Source: IIFL Research