Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q2 FY2021 Earnings Presentation
30 slides from Larsen & Toubro's earnings presentation, Oct 28, 2020
Slide 1: Analyst Presentation Q2/H1 FY21
LARSEN & TOUBRO Analyst Presentation Q2/H1 FY21 Oct 28, 2020 1 1
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward retain highly skilled professionals, time and cost looking statements concerning L&T’s future over runs on contracts, our ability to manage our business prospects and business profitability, international operations, government policies which are
Slide 3: Group Performance Highlights
01 Group Performance Highlights Engineering Manufacturing Construction Projects Technology Financial Services 3
Slide 4: Q2 FY21: Sequentially strong quarter
Q2 FY21: Sequentially strong quarter Order wins pick up QoQ Order Book stable Revenue momentum picking up amidst productivity challenges Strong sequential improvement in operational PAT Robust operational free cashflow Some green shoots of recovery seen Engineering Manufacturing Construction Project
Slide 5: Key Financial Indicators
Key Financial Indicators (Amount in ₹ bn) Q2 FY20 Q2 FY21 % Var Particulars H1 FY20 H1 FY21 % Var 483 280 -42% Order Inflow 870 516 -41% Order Book 3032 2989 -1% 353 310 -12% Revenue 650 523 -20% 40 33 -17% EBITDA 71 50 -30% 25 55 >100% PAT* 40 58 46% Net Working Capital 23.2% 26.7% RONW (TTM) (%)*
Slide 6: Group Performance Summary
02 Group Performance Summary Engineering Manufacturing Construction Projects Technology Financial Services 6
Slide 7: Q2/H1 FY21 Order Inflow/Order Book
Q2/H1 FY21 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book -42% -41% -1% H1 FY21 Q2 FY20 Q2 FY21 671 716 178 102 280 326 190 516 3032 2989 H1 FY20 613 257 870 2361 2273 316 167 483 H1 FY20 H1 FY21 Domestic International • Ordering activity in Infra relatively strong despite pandemic
Slide 8: Group Performance – Sales & Costs
Group Performance – Sales & Costs • E&C revenues register strong QoQ Q2 Q2 H1 H1 growth. % Var Rs Billion % Var FY20 FY21 FY20 FY21 • MCO expense variation largely 353.3 310.3 -12% Revenue 649.6 522.9 -20% reflective of job progress, revenue mix and cost control initiatives 34% 39% - International R
Slide 9: Group Performance – Profit Parameters
Group Performance – Profit Parameters Q2 H1 H1 Q2 FY21 % Var Rs Billion % Var FY20 FY20 FY21 40.2 33.3 -17% EBITDA 70.9 49.6 -30% • Finance cost commensurate with increased borrowings and full (6.9) (10.4) 52% Fin. Cost (12.7) (21.0) 65% commissioning of Hyd. Metro (6.3) (7.1) 13% Depreciation (10.9
Slide 10: Segment / Key Subsidiaries
03 Segment / Key Subsidiaries Engineering Manufacturing Construction Projects Technology Financial Services 10
Slide 11: Segment Composition
Segment Composition Heavy Defence Hydrocarbon Infrastructure Power Engineering Engineering Buildings & Factories (B&F) EPC- Coal & Gas Process Plant Equipment Defence Onshore Transportation Infra (TI) Thermal Power Plant Nuclear Power Plant Aerospace Offshore Heavy Civil infra (HC) Construction Equi
Slide 12: H1 FY21 Order Inflow Composition
H1 FY21 Order Inflow Composition Defence Engg. Hydrocarbon 3% Services Middle East 40% USA & 3% 12% Europe HE 21% 1% Power ROW 0.2% Others 4% 3% Infrastructure Domestic 50% 63% Order Inflow Rs 516 Bn Engineering Manufacturing Construction Projects Technology Financial Services 12
Slide 13: H1 FY21 Order Book Composition
H1 FY21 Order Book Composition HE Power 1% 5% Middle East Hydrocarbon 14% USA & Infrastructure 13% Europe 74% 1% Defence ROW Engg. 9% 3% Others 4% Domestic 76% Order Book Rs 2989 Bn Engineering Manufacturing Construction Projects Technology Financial Services 13
Slide 14: H1 FY21 Revenue Composition
H1 FY21 Revenue Composition Defence Engg. Services Middle East USA & 2% 39% 12% Europe Hydrocarbon 21% 14% HE 2% ROW Others 8% 4% Power 2% Infrastructure Domestic 37% 59% Revenue Rs 523 Bn Engineering Manufacturing Construction Projects Technology Financial Services 14
Slide 15: Infrastructure Segment
Infrastructure Segment (Amount in ₹ bn) Net Revenue -20% Net Revenue -35% 74.2 162.3 53.0 42.0 129.7 34.5 298.2 193.6 120.3 95.2 224.0 140.6 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 7.2% EBITDA Margin 6.4% 6.8% EBITDA Margin 6.3% Domestic International • Sequential improvement in ordering momentum in Q2; enc
Slide 16: Power Segment
Power Segment (Amount in ₹ bn) Net Revenue 42% Net Revenue 2% 0.8 6.9 2.6 0.5 4.8 1.0 10.4 10.6 6.4 7.8 3.8 9.8 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 4.1% EBITDA Margin 3.1% 3.7% EBITDA Margin 2.4% Domestic International • Award deferments seen in H1, healthy opening order book on back of large wins in FY
Slide 17: Heavy Engineering Segment
Heavy Engineering Segment (Amount in ₹ bn) Net Revenue -3% Net Revenue -34% 6.0 6.0 6.2 6.6 2.8 3.6 14.9 9.8 3.8 3.4 8.3 2.4 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 24.9% EBITDA Margin 5.1% 21.7% EBITDA Margin 9.9% Domestic International • Muted order wins in pandemic environment • Better capacity utilisati
Slide 18: Defence Engineering Segment
Defence Engineering Segment (Amount in ₹ bn) Net Revenue -20% Net Revenue -35% 1.3 9.6 2.9 0.9 7.6 2.0 18.9 12.4 8.7 9.5 5.6 17.6 Q2 FY20 Q2 FY21 H1 FY20 H1 FY21 18.1% EBITDA Margin 24.4% 17.4% EBITDA Margin 20.0% Domestic International • Significant order win in current year replenishes opening ord
Slide 19: Hydrocarbon Segment
Hydrocarbon Segment (Amount in ₹ bn) Net Revenue -6% Net Revenue -12% 43.0 40.4 36.6 37.0 18.1 21.5 80.7 71.1 24.9 34.1 18.9 44.1 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 12.5% EBITDA Margin 8.5% 10.2% EBITDA Margin 7.1% Domestic International • Muted order inflow due to lower capex/depressed oil prices • Im
Slide 20: Developmental Projects Segment
Developmental Projects Segment (Amount in ₹ bn) Net Revenue -22% Net Revenue -36% 14.5 5.5 0.7 3.6 11.4 0.4 26.3 16.9 10.9 11.0 20.8 16.2 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 10.2% EBITDA Margin 5.3% 10.1% EBITDA Margin 5.8% Nabha Hyd. Metro • Segment includes Power Development Business (Nabha), Hyderaba
Slide 21: IT & Technology Services Segment
IT & Technology Services Segment (Amount in ₹ bn) Net Revenue 5% Net Revenue 26% 19.1 61.7 37.8 58.8 19.1 19.1 97.0 121.9 13.8 12.9 27.1 25.9 29.7 50.8 25.5 58.6 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 19.5% EBITDA Margin 23.2% 21.0% EBITDA Margin 21.9% LTI LTTS Mindtree • LTI revenue growth led by BFS, Man
Slide 22: Others Segment
Others Segment (Amount in ₹ bn) Net Revenue -33% Net Revenue -40% 2.4 3.3 19.6 1.1 13.2 2.0 34.1 20.3 18.5 11.2 31.7 17.0 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 18.3% EBITDA Margin 18.0% 19.0% EBITDA Margin 14.1% Domestic International • Segment comprises Construction • Segment & Mining Equipment, comprise
Slide 23: L&T Finance Holdings Group
L&T Finance Holdings Group Q2 FY20 Q2 FY21 % Var Rs Bn H1 FY20 H1 FY21 % Var 34.4 33.4 -3% Income from Operations 69.1 66.3 -4% 1.1 1.7 53% PAT (Net of NCI) 4.6 2.6 -43% Mutual Fund Average AUM 692.1 630.6 -9% Net Loan Book 1,002.6 988.2 -1% Gross Stage 3 Assets 6.0% 5.2% Net Stage 3 Assets 2.8% 1.7
Slide 24: The Environment & Outlook
The Environment & Outlook Engineering Manufacturing Construction Projects Technology Financial Services 24
Slide 25: The Environment & the Outlook
The Environment & the Outlook ▪ Significantly large investment plan (NIP) Govt. focus Economic ▪ Healthy Balance Sheet, robust Order Book, Portfolio ▪ Funding plan in place (though Pvt. Sector diversity (cyclicality hedge), dependence on Public may fall short) on Infra Moat capex, Execution track re
Slide 26: Thank You
Thank You Turn overleaf for Annexures
Slide 27: Segment Margin
Segment Margin H1 FY21 H1 FY20 Segment (Rs Cr) Net EBITDA Net EBITDA EBITDA EBITDA Revenue % Revenue % Ex-Services business: Infrastructure Segment 19363 1225 6.3% 29824 2039 6.8% Power Segment 1061 25 2.4% 1045 38 3.7% Hydrocarbon Segment 7105 507 7.1% 8065 822 10.2% Heavy Engineering Segment 979 9
Slide 28: Balance Sheet
Balance Sheet Incr / Rs Billion Sept-20 Mar-20 (Decr) Equity & Reserves 723 667 56 Non Controlling Interest 102 95 7 Borrowings - Financial Services 909 939 (30) Development Projects 199 202 (3) Others 358 269 89 Sources of Funds 2,291 2,173 118 Fixed Assets 141 156 (15) Intangible Assets & Investme
Slide 29: Cash Flow
Cash Flow Q2 FY20 Q2 FY21 Rs Bn H1 FY20 H1 FY21 45.6 35.6 Operating Profit 83.0 53.3 (18.6) (1.2) Changes in Working Capital [(Inc)/Dec] (85.6) (5.0) (12.9) (6.8) Direct Taxes paid (21.7) (11.8) 14.1 27.6 Net Cash from Operations (A) (24.2) 36.5 (5.5) (3.6) Net Investment in Fixed Assets (incl. Inta
Slide 30: Share in Profit/(Loss) of JVs/Associates
Share in Profit/(Loss) of JVs/Associates Q2 FY20 Q2 FY21 Rs Bn H1 FY20 H1 FY21 0.61 0.32 Boiler/Turbine JVs 0.93 0.43 (0.01) (0.52) IDPL & Subs. (1.66) (1.15) (0.36) (0.32) Special Steels and Heavy Forgings (0.72) (0.73) 0.15 (0.01) Others 0.22 (0.09) 0.40 (0.53) Total (1.23) (1.54) Engineering Manu