L&T Q4 results preview: All eyes on West Asia impact commentary

Larsen & Toubro Ltd is all set to report its March quarter results om Tuesday. If one were to go by analyst estimates, the engineering and construction major is seen reporting a single digit rise in year-on-year(YoY)  net profit on a double-digit growth in sales. The quarter may see relatively robust execution, as L&T pushed to achieve its 15 per cent YoY revenue growth guidance, after a relatively softer growth of 12.8 per cent YoY in the first three quarters. Execution in the Q4 could be supported by a renewed thrust in the water segment following the announcement of Jal Jeevan Mission 2.0, analysts said.

They, however, noted that a prolonged blockade of the Strait of Hormuz could disrupt raw material availability with inventory buffers potentially starting to run down April onward while any further escalation in the conflict may also trigger labour shortages through worker exodus.

Ahead of its earnings, L&T shares were trading 1.38 per cent lower at Rs 4,045 apiece. This is even as its arm L&T Energy Hydrocarbon Onshore won a large order from Bharat Coal Gasification and Chemicals Ltd (BCGCL), a joint venture of Coal India Ltd (CIL) and Bharat Heavy Electricals Ltd, for a Coal-to-Ammonia-Nitrate project in Odisha. 

Mirae Asset Sharekhan sees L&T's Q4 profit at Rs 5,507 crore, up 9.6 per cent YoY. Sales is seen at Rs 87,411 crore, up 17.5 per cent YoY.

Nuvama Institutional Equities said L&T's Q4 net profit may come in at Rs 5,931.90 crore, up 7.9 per cent YoY over Rs 5,497.30 crore in the same quarter last year. It sees revenue rising 10.6 per cent YoY to Rs 82,290 crore compared with Rs 74,392 crore YoY. order inflows are seen rising 3 per cent YoY, but down 3.9 per cent sequentially to Rs 92,303 crore, with order book seen at Rs 7,39,238 crore. Ebitda margin may come in at 11.4 per cent.

PL Capital, which sees L&T's net profit rising 5.8 per cent to Rs 5,435 crore in Q4, said the company is well-placed to benefit from strong international prospects led by the West Asia. But given the current geopolitical situation, execution in the region, which account for 37 per cent of the total order book, may face near-term headwinds, which remain a key monitorable. 

It said the divestment of non-core development assets such as Hyderabad Metro and Nabha Power will aid the next phase of growth. 

MOFSL expects L&T's consolidated revenue to grow at 17 per cent YoY, led by 19 per cent YoY revenue growth for core E&C. Key monitorables include execution of order book in the
West Asia, potential to reconstruct post the war, rampup in domestic ordering, margin performance, and net working cycle. 

"We expect Ebitda margin to contract 30 bps YoY to 9.6 per cent for Core E&C to factor in the current disruption in work at some locations in the Middle East. We will also watch out for an update on the Middle East ordering and execution," it said.

L&T dividend announcement today

The engineering and construction major, which did not announce any interim dividend for FY26 so far, as per AceEquity, will consider paying final dividend today. L&T declared Rs 34 per share dividend each for FY25 and FY24, Rs 22 per share dividend for FY23 and Rs 22 per share dividend for FY22, data showed. Today, its board will consider a final dividend for the financial year.