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L&T Q1 Results FY22-2023

26 July 2022

Larsen & Toubro, an Indian multinational engaged in EPC Projects and hi-tech manufacturing and services, declared its financial results for Q1 FY23 on July 26, 2022.

The company published a strong all-around performance during the quarter. L&T recorded a consolidated profit after tax (PAT) of Rs. 1,702 crores, depicting a robust growth of 45% Y-o-Y (year on year).  The consolidated revenues of the multinational company jumped 22% Y-o-Y to Rs. 35,853 crores in Q1 FY23 from the Rs. 29,334 crores reported in the same quarter of the previous year. 

Strong execution in the infrastructure segment and growth momentum in the IT & Technology Services portfolio helped achieve heightened profit and revenues. International revenues during the quarter stood at Rs. 13,235 crores, constituting 37% of the total revenue. 

L&T secured orders worth Rs. 41,805 crores for the quarter, registering a growth of 57% Y-o-Y. During the quarter, orders were received across diverse segments like Public Spaces, Metros, Water Management & Waste Water, Minerals and Metal, Factories, Data Centers, Defence, Power Transmission and Distribution and Hydrocarbon Offshore sectors. International orders comprised 43% of the total order inflow. 

The basic EPS of the company was recorded at 12.11%, higher than last year at 8.36%. The script closed at Rs. 1,751 per piece, down 1.75%, as Sensex shed ~500 points on global and domestic cues. 

Hits of L&T Q1 Results 2022

  • The company declared a robust, strong all-around performance for the quarter. 
  • PAT came in at Rs. 1,702 crores, jumping 45% on a yearly basis
  • Revenue was published at Rs. 35,853 crores, up 22% Y-o-Y
  • L&T secured orders worth Rs. 41,805 crores for the quarter, high 57% Y-o-Y
  • The company depicted strong numbers in all major segments

Segment wise revenue under Q1 Results of L&T

  • Infrastructure Projects - The Infrastructure Projects segment secured order inflows of Rs. 18,343 crores, registering a growth of 66% compared to the corresponding quarter of the previous year
  • Energy Projects - The Energy Projects Segment secured orders valued at Rs. 4,366 crores in Q1 FY23, jumping 128% Y-o-Y from Rs. 1,912 crores in Q1 FY22.
  • Hi-Tech Manufacturing - The segment secured orders valued at Rs. 3,489 crores in Q1 FY23, up 222% Y-o-Y from Rs. 1083 crores in Q1 FY22.
  • IT & Technology Services - The segment recorded customer revenues of Rs. 9,424 crores for the quarter, registering a Y-o-Y growth of 30% from Rs. 7,232 crores in Q1 FY22.
  • Development Projects - The segment recorded customer revenues of Rs. 1,345 crores in Q1 FY23, registering 19% growth over Rs. 1,126 crores for the corresponding quarter of the previous year.
  • Others - “Others” segment that comprises Realty, Construction & Mining Machinery, Rubber Processing Machinery, Industrial Valves and Smart World and Communication. These businesses posted revenue at Rs. 1,599 crores in Q1 FY23, jumping 21% Y-o-Y from Rs. 1,119 crores in Q1 FY22. 
  • Financial segment - L&T Finance Holdings, a listed subsidiary, posted income from operations at Rs. 2,958 crores during the quarter ended June 30, 2022, registering a Y-o-Y decline of 3% from Rs. 3,061 crores in Q1 FY22. 

What the management says about L&T Results

In its official press release, the company released the following statement – 

“The Indian economy continues to sustain the strong recovery momentum evidenced by robust monthly high-frequency indicators. The Government’s move to cut taxes on petrol and diesel, imposition of export duty on steel and petroleum, restrictions on food exports and RBI’s recent action of increasing the REPO rate should ease the overall inflationary pressure. 

India, however, faces near-term challenges in reining the fiscal deficit and yet manages to sustain the economic growth momentum despite higher inflation and a more adverse balance of payments situation. The Government's persistent efforts to jumpstart economic growth through higher infrastructure spending and incentivising domestic manufacturing should yield benefits in the medium term. 

On the global front, oil price dynamics and recent geopolitical developments have led the global economy towards a zone of uncertainty in an environment of high inflation, volatile commodity prices, imposition of sanctions and resultant supply chain disruptions. The Middle East region, important geography for the Company’s Projects business, is likely to be benefitted from the high oil prices resulting in higher hydrocarbon and infrastructure Capex spend. This augurs well for the company in terms of providing a larger scope of contracting opportunities.

L&T, in its first-year post announcing its Lakshya 2026 Strategic Plan, expects to continue its planned trajectory of profitable growth through efficient and timely execution of its large order book and, along with its many value-enhancing measures, retain its leadership position and improve shareholder return on a sustainable basis. The company is on the path of diversification into the new businesses of Green Energy and E-commerce Platforms and, at the same time, pursuing exit options/limit exposure in non-core businesses over the Lakshya 2026 strategic plan period”.

In other news

  • Larsen & Toubro is an Indian multinational engaged in EPC Projects, Hi-Tech manufacturing and services, operating in over 50 countries worldwide. 
  • A strong, customer-focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for eight decades.
  • L&T’s market capitalisation stood at Rs. 2,46,048 crores.
  • The company RoCE (return on capital employed) and RoE (return of assets) came in at 11% and 10.3%, respectively.

To read the RA disclaimer, please click here
Research Analyst: Bavadharini KS

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