Larsen & Toubro releases annual financial results for the Financial Year 2022-23

Larsen & Toubro achieved Consolidated Revenues of ₹ 183,341 crore for the year ended March 31, 2023 recording a healthy y-o-y growth of 17%, aided by strong execution of a large order book in the Infrastructure Projects segment and robust momentum in the IT & TS portfolio. International revenues during the year at ₹ 68,787 crore constituted 38% of the total revenue.

More Details:

• For the quarter ended March 31, 2023, the Consolidated Revenues at ₹ 58,335 crore recorded a y-o-y growth of 10%. The share of international revenues during the quarter was 39%.
• The Company for the year ended March 31, 2023, posted a total Consolidated Profit After Tax (PAT) of ₹ 10,471 crore, registering a robust growth of 21% compared to the previous year.
• The PAT includes an exceptional gain of ₹ 97 crore (net), attributed to profit on divestment of the Mutual Fund business of the Financial Services segment partly off-set by a one time charge due to remeasurement of the wholesale loan assets of the Financial Services segment at fair value.
• For the quarter ended March 31, 2023, the PAT at ₹ 3,987 crore, registered a growth of 10% y-o-y basis.
• The Board of Directors has recommended a final dividend of ₹ 24 per equity share, for the approval of shareholders.
• The Company received orders worth ₹ 230,528 crore at the group level during the year ended March 31, 2023, registering a healthy y-o-y growth of 19%. During the year, orders were received across multiple segments like Public Spaces, Hydel & Tunnels, Irrigation Systems, Ferrous Metals, Oil & Gas, Power Transmission & Distribution and Defence sectors.
• International orders at ₹ 86,523 crore during the year comprised 38% of the total order inflow.
• The order inflow for the quarter ended March 31, 2023 stood at ₹ 76,099 crore, registering a growth of 3% over the corresponding quarter of the previous year. International orders at ₹ 36,046 crore constituted 47% of the total.
• The consolidated order book of the group is at ₹ 399,526 crore as on March 31, 2023, with international orders having a share of 28%. The order book of ₹ 399,526 crore represents a growth of 12% over ₹ 357,595 crore as on March 31, 2022.

Infrastructure Projects Segment:

• The Infrastructure Projects segment secured order inflow of ₹ 117,119 crore, during the year ended March 31, 2023, registering a substantial growth of 25%, as compared to the previous year, on receipt of multiple large value orders across sub-segments. International orders at ₹ 26,184 crore constituted 22% of the total order inflow of the segment during the year.
• The segment secured orders of ₹ 41,187 crore, during the quarter ended March 31, 2023, registering degrowth of 9% largely due to a high base, over the corresponding quarter of the previous year. International orders constituted 29% of the total order inflow for the quarter.
• The segment order book stood at ₹ 284,850 crore as on March 31, 2023, with the share of international orders at 22%.
• For the year ended March 31, 2023, the customer revenue at ₹ 86,717 crore registered a healthy y-o-y growth of 20%, aided by ramp up of execution of the large value orders in the portfolio. International revenue constituted 22% of the total customer revenue of the segment during the year.
• The segment recorded customer revenues of ₹ 31,222 crore for the quarter ended March 31, 2023, registering a y-o-y growth of 5%. International revenues constituted 27% of the total customer revenues of the segment during the quarter.
• The EBITDA margin of the segment during the year ended March 31, 2023 was at 7.0% vis-à-vis 8.2% recorded in the previous year. Margin for the year remained subdued largely due to commodity price increases and logistic issues.

Development Projects Segment:

• The segment recorded customer revenues of ₹ 5,024 crore during the year ended March 31, 2023 registering a healthy growth of 15% over the previous year, driven by a higher PLF in the Nabha Power Plant and increase in ridership in Hyderabad Metro.
• For the quarter ended March 31, 2023, the customer revenues at ₹ 1,229 crore, recorded a growth of 12% y-o-y.
• The segment EBIT for the year ended March 31, 2023 registered a profit of ₹ 392 crore as compared to a loss of ₹ 231 crore during the previous year, primarily aided by consolidation of Nabha Power profit led by increase in benchmark valuations and improved Metro ridership.
• During the year, the company entered into a Share Purchase Agreement with Edelweiss Alternatives, to sell its entire shareholding in L&T Infrastructure Development Projects Limited, a joint venture having multiple toll road concessions and a transmission line asset in its portfolio. Accordingly, the investment in the joint venture has been classified as “Held for Sale”, pending receipt of necessary approvals.

Outlook:

• India’s economic growth continues to display encouraging resilience amidst the continuing global chaos. Prudent fiscal and monetary policy management from the Government and RBI respectively has resulted in partial decoupling of India’s growth story with the rest of the world.
• The Government’s push for growth through larger infrastructure spends is clearly evident from the enhanced budgetary allocations for FY 2023-24. PLI incentives, improved business confidence and buoyant demand conditions will continue to facilitate the positive environment.
• Going forward, improved tax collections for the Government will support its Capex led growth aspiration. Further, bank balance sheets are healthy providing opportunities to lend funds to projects.
• With the Government’s enhanced thrust towards manufacturing and exports, the country’s goods trade deficit should narrow over time. India is committed to Net Zero goals and both the Government and the private sector are committed to investments around energy transition.
• Amidst these various moving parts, the silver lining is that India would remain one of the fastest growing economies in the world.
• The last two years have seen the global economy striving to deal with overlapping crises, the latest being the liquidity troubles after a series of global bank crises. While the impact appears to have been contained, these uncertainties continue to undermine the confidence among consumers and businesses to spend, thereby impacting global growth.
• Governments and Central Banks across the world are attempting to strike a balance between containing cost push inflation and pursuing demand led growth.
• Nevertheless, a combination of China’s reopening, a significant easing of the natural gas crisis in Europe and a resilient US consumer confidence should help the global economy overcome the current uncertainty overhang.
• With OPEC and partner countries announcing unexpected production cuts, oil prices are likely to remain firm at current levels, aiding the GCC nations to pursue their capex plans in oil, infrastructure, green energy and other industrial sectors.
• In this backdrop, the Company will focus with cautious optimism on (a) large project wins, (b) timely execution of its large order book, (c) growth of its services portfolio in the stated glide path and (d) preservation of liquidity and optimum use of capital and other resources.
• The Company is optimistic about its growth aspirations in the medium term despite an uncertain macro environment and is committed to creation of sustainable value to all its stakeholders.

Background:

• Larsen & Toubro is a USD 23 billion Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services. It operates 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.

Source: Larsen & Toubro- Press Release | Image Credit (representational): L&T