Result Update Report for FY25 Q1 - Larsen & Toubro Limited
1. About
Larsen & Toubro Limited (L&T) is a leading Indian multinational conglomerate engaged in technology, engineering, construction, manufacturing, and financial services. With operations in over 30 countries, L&T is renowned for its execution capabilities in large and complex projects across various sectors, solidifying its position as a premier EPC contractor globally.
2. Business
- Engineering & Construction Excellence: L&T specializes in executing large-scale infrastructure projects, including transportation, power, water, and urban development.
- Diversified Portfolio: The company operates across multiple segments such as Infrastructure, Energy, Hydrocarbon, IT & Technology Services, Financial Services, and Manufacturing.
- Global Footprint: Significant international presence, particularly in the Middle East, Africa, and Southeast Asia, contributing to diversified revenue streams.
- Technological Innovation: Investments in digital technologies, AI, IoT, and automation to enhance project execution and operational efficiency.
- Robust Order Book: Strong order book of ₹4.91 trillion as of June 2024, providing revenue visibility for the coming years.
3. Why We Like Larsen & Toubro
- Consistent Financial Performance: Demonstrated robust revenue and profit growth over the years, showcasing financial stability.
- Leadership Position: Market leader in EPC projects with competitive advantages and economies of scale.
- Strong Order Pipeline: Healthy prospects pipeline of ₹9.07 trillion for the remaining nine months of FY25.
- Focus on High-Growth Sectors: Strategic investments in renewable energy, digital services, and infrastructure align with global trends.
- Improving Return Ratios: Enhanced ROE and ROCE indicate efficient capital utilization and profitability.
4. Recent Updates
- Strong Q1 FY25 Performance: Revenue up by 15% YoY to ₹55,119.82 crore; PAT increased by 12% to ₹2,785.72 crore.
- Credit Rating Upgrades: Received 'BBB+' rating with a stable outlook from S&P and Fitch, reflecting strong financial health.
- ESG Rating Improvement: MSCI ESG rating upgraded from 'BB' to 'BBB', highlighting advancements in environmental and safety standards.
- Strategic Divestments: Completed the sale of stake in L&T Infrastructure Development Projects Limited, enhancing ROE.
- Major Order Wins: Secured significant orders in renewable energy and offshore sectors, strengthening market position.
5. Financial Projections
| Metrics |
FY25 (Projected) |
FY26 (Projected) |
FY27 (Projected) |
| Revenue (₹ Crore) |
2,54,280 |
2,92,422 |
3,36,285 |
| EBITDA (₹ Crore) |
29,970 |
34,466 |
39,636 |
| OPM (%) |
11.8% |
11.8% |
11.8% |
| PAT (₹ Crore) |
15,018 |
17,271 |
19,862 |
| EPS (₹) |
109.27 |
125.62 |
144.50 |
| P/E |
31.75 |
27.63 |
24.03 |
| RoCE (%) |
15.0% |
15.5% |
16.0% |
| ROE (%) |
15.0% |
15.5% |
16.0% |
6. Conclusion
Larsen & Toubro continues to showcase strong operational and financial performance, supported by a robust order book and strategic focus on high-growth sectors. The company's leadership position, combined with its commitment to innovation and efficiency, positions it favorably for sustained growth in the coming years.