Q1FY23 Preview: Larsen -; Toubro: Revenue seen at Rs343,826 million, PAT at Rs16,771 million

25 Jul 2022 , 12:39 PM

Result date: 26^th 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