Larsen & Toubro Q4 results preview: Profit may jump 13-22%; all eyes on commentary on non-core assets

Larsen & Toubro ltd (L&T) is expected to report a 13-22 per cent year-on-year (YoY) rise in net profit in the March quarter on double digit rise in sales. Ebitda margin is seen stable YoY at around 12.3 per cent, a strong expansion from 10.9 per cent in the December quarter.

Analysts said L&T announced EPC order inflows in the range of Rs 20,000-24,000 crore during the quarter. The orders were from railways, hydrocarbon, power T&D, water treatment, heavy engineering, buildings & factories segments, indicating strong order inflows for the quarter amid challenging environment globally. All eyes would be on the management commentary on non-core assets, analysts said.

"We expect L&T to grow its consolidated ex-services revenues by 10 per cent YoY. We expect its core E&C Ebitda  margin to improve by 40 bps YoY on lower commodity prices. The announced order inflow for L&T for 4QFY23 has so far remained below our expectations, but the announcements do not include orders where negotiations are still ongoing with clients," Kotak Institutional Equities said.

Antique Stock Broking sees profit for the quarter at Rs 4,078 crore, up 12.6 per cent over Rs 3,621 crore in the year-ago quarter. It sees sales at Rs 59,824 crore compared with Rs 52,851 crore YoY.

Prabhudas Lilladher expects consolidated revenue to grow 11.6 per cent YoY at Rs 59,004 crore, led by growth in IT, Energy Projects, Hi-Tech Manufacturing and developmental projects.

"Strong tender pipeline from domestic as well as exports market is likely to drive order inflows. During the quarter, L&T announced orders in range of Rs 21,000-34,000 crore. The management commentary on status of non-core assets like Nabha power, metro ridership & financial assistance will be key monitorables," the brokerage said.

ICICI Securities expects strong execution pick-up YoY.  "In our view, working capital and cash flow management will be key monitorables. Consequently, we expect standalone revenue to grow 12.1 per cent to Rs 41,971.5 crore. Ebitda is expected to grow 12.9 per cent to Rs 4,369.20 crore with margins expected at 10.4 per cent owing to better execution. Adjusted PAT (ex-E&A) expected to grow 16.9 per cent to Rs 3,392.70 crore on account of operating leverage and lower finance costs," it said.

Kotak sees Q4 profit at Rs 4,407 crore, up 21.7 per cent YoY. It sees sales at Rs 59,252 crore, up 12.1 per cent YoY.

"We bake in inflows of Rs 63,000 crore for 4QFY23E; announced order inflows for the quarter so far are lower and mostly includes orders from hydrocarbon, water, B&F, metals and mining, and transmission. We expect the core E&C business' Ebitda margin at 10.4 per cent, up 40 bps YoY. We expect improvement in the margin to be driven by lower commodity prices," Kotak said.

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