L&T Q1FY20: PAT increases by 21.2% YoY to Rs 1,473 crore, new orders worth Rs 38,000 cr won

The infrastructure giant Larsen & Toubro (L&T) missed analysts' estimates during June 2019 (Q1FY20) quarterly result on both top-line and bottom-line front. In its audit report, L&T stated that, overall consolidated profit after tax (PAT) including PAT from discontinued operations for the quarter grew by 21.2% to 1,473 crore vis-a-vis 1,215 crore for the corresponding quarter of the previous year. If PAT is excluded from discontinued operations, then L&T’s net profit would come around Rs 1,361 crore from just continuing operations, which would be a rise of 20.5% on a yearly basis. A Bloomberg poll of expert had predicted L&T’s PAT to come around Rs 1,560 crore during the quarter. 

On the other hand, consolidated gross revenue was at Rs 29,636 crore from continuing operations for the quarter ended June 30, 2019, achieving y-o-y growth of 10%. The International revenue during the quarter at 9,268 crore constituted 31% of the total revenue. The poll had expected revenue to be around Rs 31,292 crore in Q1FY20.

Further, consolidated Order Book of the group stood at Rs 294,014 crore as at June 30, 2019, with international Order Book constituting 21% of the total Order Book. 

Here’s how various segments performed! 

Power: 

The segment  secured orders of Rs 6,700 crore for the quarter ended June 30, 2019 registering significant growth on receipt of a large value domestic order for a 2x660 MW ultra- supercritical thermal power plant in Buxar, Bihar.

Power Segment recorded customer revenue of Rs 561 crore during the quarter ended June 30, 2019, registering a y-o-y decrease of 48% on lower opening order book. International revenue constituted 28% of the total customer revenue of the segment during the quarter.   

Infrastructure:

It secured fresh orders of Rs 17,497 crore, during the quarter ended June 30, 2019, lower by 10% compared to the previous year. Order wins were mainly from the airport sector, gold beneficiation award in Saudi, water supply 8 distribution order in Sri Lanka, a notable desalination plant order in Gujarat and an order for a Defence telecom network. International orders at Rs 4,954 crore constituted 28% of the total order inflow of the segment during the year. 

Infrastructure Segment recorded Customer Revenue of Rs 13,865 crore for the quarter ended June 30, 2019 leading to a y-o-y growth of 14%. Growth was contributed by good execution progress across business verticals of the segment. International revenue constituted 23% of the total customer revenue of the segment during the year. 

EBITDA margin of the segment during the quarter ended June 30, 2019 was lower at 6.4% compared to the previous year 6.8%, largely due to job mix and seasonality of execution.

Heavy Engineering:

This segment secured orders valued at Rs 188 crore during the quarter ended June 30, 2019 representing a decline of 87% y-o-y mainly due to deferment of orders in Oil and Gas sector. International orders constituted 55% of the total order inflow of the segment during the quarter. 

Customer Revenue of Rs 874 crore which is more than double the revenue of the corresponding quarter of the previous year, with execution momentum in oil & gas, and fertiliser and petrochemical projects. International sales constituted 44% of the total customer revenue of the segment. 

Defence Engineering:

It received orders of Rs 443 crore during the quarter ended June 30, 2019, registering growth over the corresponding quarter of the previous year. International orders constituted 40% of the total order inflow of the segment. 

Customer revenue of Rs 965 crore registering a y-o-y growth of 33% over the corresponding quarter of the previous year led by pick up in execution of a significant order for tracked artillery guns. International Revenue constituted 4% of the total customer revenue of the segment.

Hydrocarbon:

The segment’s revenue was at Rs 3,763 crore during the quarter ended June 30, 2019, registering a y-o-y growth of 7%. International Revenue constituted 49% of the total customer revenue of the segment for the quarter ended June 30, 2019. In the quarter, the segment secured orders valued Rs 3,424 crore during the quarter ended June 30, 2019, a decline of 28% compared to corresponding quarter of the previous year, with no major international order.

IT & Technology Services (ITaTS) 

Revenue was at Rs 3,819 crore during the quarter ended June 30, 2019, registering y-o-y growth of 15%. International sales constituted 91% of the total customer revenue of the segment for the quarter ended June 30, 2019. An array of business verticals has contributed to the strong growth (CPG, retail It pharma, Hi-Tech, media Et entertainment and Energy Et Utilities in LEIT Infotech group and Transportation, Medical devices and Process Engineering verticals in L&T Technology Services group). 

Financial Services:

Revenue of Rs 3,462 crore during the quarter ended June 30, 2019, registering a y-o-y growth of 13%, driven by growth in loan assets and accrual of revenue on favourable outcome of NCLAT order in connection with exposure to ILFS.

Loan Book grew from Rs 86,321 crore to Rs 99,904 crore registering a noteworthy growth of 16% in a volatile environment. One-time provision made on conservative basis for potential impairment of exposure to an HFC borrower has led to drop in the margin for the business.

Overall, during the quarter, L&T successfully won new orders worth Rs 38,700 crore at the group level during the quarter ended June 30, 2019 registering a growth of 11%. International orders during the year at 9,005 crore constituted 23% of the total order inflow.

Investors were trading on wait-and-watch mode on L&T, as the share price finished at Rs 1,410 per piece up by 0.44% on Sensex. However, the company has touched an intraday high and low of Rs 1,414.70 per piece and Rs 1,386.50 per piece respectively.