Larsen & Toubro (L&T) has reported its best-ever quarterly order inflow in the second quarter (Q2) at ₹89,153 crore, marking a 72% year-on-year (YoY) growth. The construction major also witnessed a 45% increase in net profit to ₹3,223 crore, compared to ₹2,229 crore in the same quarter last year. Its revenue from operations also grew by 19% to ₹51,024 crore in Q2 FY24, up from ₹42,763 crore in Q2 FY23.
According to S N Subrahmanyan, CMD of L&T, the company has received the highest-ever order inflows in its history during the quarter. He added that L&T now ranks first among international engineering procurement and construction (EPC) contractors working in the MENA (Middle East and North Africa) region in terms of project value. The company’s consolidated order book currently stands at ₹4.5 lakh crore, with international orders accounting for 35%.
The CFO of L&T, Shankar Raman, stated that the prospect pipeline for the next 6-12 months is encouraging, and the company is likely to outperform its order inflow and revenue guidance for FY24, depending on the first half’s performance. At the beginning of the financial year, L&T guided for a 10-12% growth in order intake and a 12-15% revenue growth for FY24.
Despite ongoing conflicts between Israel and Hamas, L&T does not anticipate significant disruptions or derailing of its projects. Raman mentioned that the company has overcome the supply chain constraints caused by COVID-19 and is returning to normalcy. While risks remain, it does not cause major concerns for the company.
The company’s earnings before interest, taxes, depreciation, and amortization (EBIDTA) grew by 15% in the second quarter. However, the EBIDTA margins witnessed a slight decline, dropping to 11% from 11.4% on a YoY basis. The infrastructure segment’s EBIDTA margin declined by 1.1% YoY to 5.4% in Q2, primarily due to rising input costs for pre-COVID legacy contracts. Raman assured that these margins will normalize in the subsequent quarters as these projects near completion.
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