India: Larsen and Toubro reports 19% y-o-y growth in order book in Q1FY'25

Larsen & Toubro's (L&T) order book registered a 19% y-o-y growth at INR 4,909 billion for the quarter ending 30 June 2024. The company has an order pipeline of INR 9.07 trillion for the remaining nine months of FY'25.

Key takeaways from investor call:

Order inflow rises 8% y-o-y: The company's order inflow rose 8% on y-o-y basis to INR 709 billion in Q1FY'25 against INR 655 billion in Q1FY'24. Out of the total, domestic order inflows amounted to INR 383 billion and international amounted to INR 326 billion during the quarter. Strong momentum in the Middle East drove the inflow growth during the quarter.

Revenue grows 15% y-o-y: The company's revenue registered 15% growth y-o-y at INR 551 billion in Q1 compared with INR 479 billion in corresponding period of last year (CPLY). Strong order momentum in infrastructure, hydrocarbon and precision engineering and systems businesses contributed to revenue growth.

Segment-wise performance:

Infrastructure segment: The order inflow in the segment was INR 401 billion in Q1. During the quarter, orders were largely received in renewables, transmission and distribution (T&D), roads, nuclear power, hydel and tunnel, ferrous metals, health and precision engineering sectors.

The order pipeline in the infrastructure segment for the remaining 9MFY'25 is INR 6.03 trillion as against INR 5.86 trillion in CPLY. The intra-prospects pipeline of INR 6.03 trillion comprises domestic prospects of INR 4.27 trillion and international prospects of INR 1.76 trillion.

Hydrocarbon segment: The hydrocarbon segment received multiple domestic offshore orders, which increased its order book. The order book for the segment is at INR 1.18 trillion as of 24 June 24, with the hydrocarbon order book at INR 1.13 trillion and power at INR 46 billion.

The segment has a strong order prospect pipeline of INR 2.62 trillion for the remaining 9MFY'25. Out of the total, hydrocarbon comprises INR 2.17 trillion and energy power prospects INR 0.45 trillion.

Hi-tech manufacturing: The receipt of a shipbuilding order boosted the order inflow in the precision engineering and systems (PES) segment, while heavy engineering's order inflow remained steady. The segment's order book stands at INR 338 billion as of June 2024, with an order prospect pipeline of around INR 320 billion for the next nine months.

Outlook

The company faced labour shortages in Q1 due to elections and extreme heat which affected productivity. Furthermore, conditions in Q2 are expected to improve, and H2 is anticipated to drive significant growth.