Larsen & Toubro provided snapshot of its Q3 FY2021-22 results which shows stable group margin performance despite commodity headwinds in the EPC & Manufacturing businesses. The corresponding quarter of the previous year had an instance of a sale of commercial property in Realty business and gain on divestment from discontinued operations of the Electrical & Automation business.
The company reported a consolidated revenue growth of 11% at Rs 39,563 crore. The increase was pointed out to be a reflection of improving project execution momentum and robust growth in the IT&TS portfolio.
Order Inflows and Order Book
L&T Order Book stands at record levels of ₹ 340,365 Cr., provides multiyear revenue visibility
The Company bagged orders worth ₹ 50,359 crore during the quarter ended December 31, 2021, registering 31% decline over the corresponding period of the previous year. Corresponding year had secured largest ever EPC order for Mumbai Ahmedabad High Speed Rail.
Robust order announcements and tendering activity continued at a brisk pace in the current year. With improved government finances, expect strong activity levels in Q4.
Outlook
Improved macro environment as Indian economy re integrates back in Q3 post the 2nd Covid wave.
In the backdrop of the current economic environment, the Company continues its planned path of winning targeted orders, focus on profitable execution of its large order book, leverage the strong growth momentum in its IT & TS portfolio value enhancing measures; Strong tailwinds witnessed in the IT & TS portfolio.
Balancing “Execution growth” and “Working capital” intensity in a challenging year.
Divestments: Of non-core businesses a priority.
Return Ratios: Will be pursued aggressively in order to create sustainable long term returns for shareholders.
Enhanced Public Capex spends are the key to economic revival. Return of Private Capex to compliment growth.
ESG development
During the quarter the company reaffirmed its commitment to integrate its ESG goals with business targets and is working towards becoming a ‘Net Zero’ company; aims to achieve carbon neutrality by 2040 and water neutrality by 2035.