Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q1 FY20 Earnings Presentation
32 slides from Larsen & Toubro's earnings presentation, Jul 23, 2019
Slide 1: Analyst Presentation Q1 FY20
1 Analyst Presentation Q1 FY20 July 23, 2019
Slide 2: Disclaimer
2 Disclaimer This presentation contains certain forward retain highly skilled professionals, time and looking statements concerning L&T’s future cost over runs on contracts, our ability to business prospects and business profitability, manage our international operations, which are subject to a numb
Slide 3: Presentation Outline
3 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 4: Performance Highlights – Q1 FY20
4 Performance Highlights – Q1 FY20 +21% +20% +10% +9% +11%
Slide 5: Key Financial Indicators
5 Key Financial Indicators Amount in Rs bn Q1 FY19 Particulars Q1 FY20 % Var 348 Order Inflow 387 11% 2687 Order Book 2940 9% 270 Revenue 296 10% 28 EBITDA 33 20% 12 Reported PAT 15 21% 21% Net Working Cap (Incl. E&A) 23% 2% 14.6% RONW (TTM) (%) 15.4% +80bps
Slide 6: Presentation Outline
6 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 7: Q1 FY20 Order Inflow / Order Book
7 Q1 FY20 Order Inflow / Order Book Amount in Rs bn Order Inflow 387 348 • Order Inflow momentum sustained through PSU & Private Sector orders • Award delays slow down International Order Inflow Order Book • Robust Order Book provides hedge against cyclicality 9% 2631
Slide 8: Group Performance – Sales & Costs
8 Group Performance – Sales & Costs Rs Billion Q1 FY19 Q1 FY20 % Var • Revenue growth driven by Infra, Heavy Engineering , Revenue 270.0 296.4 10% IT&TS and Fin Serv businesses International Rev. 35% 31% -3% • Higher Fin charge opex reflects increase in borrowing MCO Exp. 164.9 179.4 9% costs and la
Slide 9: Group Performance – EBITDA to PAT
9 Group Performance – EBITDA to PAT Rs Billion Q1 FY19 Q1 FY20 % Var EBITDA 27.6 33.2 20% • Growth in other income on higher Other Income 2.3 3.8 69% investment base Fin. Cost (3.6) (5.9) 61% • Finance cost commensurate with Depreciation (6.0) (4.6) -24% debt levels and phased commencement of Hyd. M
Slide 10: Presentation Outline
10 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 11: Segment Composition
11 Segment Composition Heavy Defence Infrastructure Power Hydrocarbon Engineering Engineering Buildings & Factories (B&F) Process Plant EPC- Coal & Gas Equipment Defence Transportation Infra (TI) Onshore Heavy Civil infra (HC) Thermal Power Plant Construction Nuclear Power Plant Water & Effluent Tre
Slide 12: Q1 FY20 Order Inflow Composition
12 Q1 FY20 Order Inflow Composition Defence Engg. 1.1% Hydrocarbon HE 8.9% 0.5% Services 21.9% Power Order Inflow 17.3% Others Rs 387 Bn 5.1% Middle East 10.1% Infrastructure 45.2% USA & Europe 8.5% ROW 4.7% Domestic 76.7%
Slide 13: Q1 FY20 Order Book Composition
13 Q1 FY20 Order Book Composition HE 1.4% Defence Engg. 3.8% Power 4.4% Hydrocarbon 13.7% Others 2.3% Order Book Rs 2940 Bn Infrastructure Middle East 74.4% 11.4% USA & Europe 0.8% ROW 9.0% Domestic 78.8%
Slide 14: Q1 FY20 Revenue Composition
14 Q1 FY20 Revenue Composition Services Defence Engg. Hydrocarbon 28.6% 3.3% 12.7% HE 3.0% Revenue Power Others Rs 296 Bn 1.9% 3.9% Middle East 14.7% Infrastructure USA & Europe 46.8% 11.4% ROW 5.1% Domestic 68.7%
Slide 15: Infrastructure Segment
15 Infrastructure Segment Amount in Rs bn Net Revenue • Order Inflow contributed by Public & Private sector 14% • Strong revenue growth on robust order book conversion across business verticals • Margins reflect stage of execution and job mix 6.8% EBITDA Margin 6.4%
Slide 16: Power Segment
16 Power Segment Amount in Rs bn Net Revenue • Receipt of large EPC order replenishes Q1 Order Book • FGD & SCR investments provide opportunity within 48% demand supply imbalances in the sector • Revenue decline reflects low opening order book • Margins reflective of job mix & stage of execution • P
Slide 17: Heavy Engineering Segment
17 Heavy Engineering Segment Amount in Rs bn Net Revenue • Q1 Inflows impacted by deferments • Stellar revenue growth driven by healthy opening 162% Order Book • Global competence, technology differentiation, proven track record and cost efficiencies yield strong margins. 36.1% EBITDA Margin 19.5% P
Slide 18: Defence Engineering Segment
18 Defence Engineering Segment Amount in Rs bn Net Revenue • Slow pace of policy change continues to inhibit private sector participation 33% • Execution of tracked artillery gun order continues to drive revenue growth & margins • Margins reflect stage of execution, job mix and 11.1% EBITDA Margin 1
Slide 19: Hydrocarbon Segment
19 Hydrocarbon Segment Amount in Rs bn Net Revenue • Q1 Order Inflows from domestic awards 7% • Revenue growth on the back of higher Order Book • Firm oil prices leading to healthy prospect pipeline • Stable margins maintained through efficient execution 7.0% EBITDA Margin 7.6%
Slide 20: IT & Technology Services Segment
20 IT & Technology Services Segment Amount in Rs bn Net Revenue • LTI revenue growth led by CPG, Retail & Pharma, High-Tech, Media & Entertainment, and 15% Energy & Utilities • LTTS revenue growth led by Transportation, Plant Engineering and Medical Devices verticals • Margin reduction on increased
Slide 21: Developmental Projects Segment
21 Developmental Projects Segment Amount in Rs bn • Segment includes Power Net Revenue Development business, Hyderabad Metro • Kattupalli Port divestment drove revenues & margins for PY 21% • Revenue largely contributed by Power Development Business • Hyderabad Metro: Partial CoD of 30 Km in Nov’17,
Slide 22: Others Segment
22 Others Segment Amount in Rs bn Net Revenue • Segment comprises Construction & Mining Equipment, Rubber processing 14% Machinery, Industrial Valves and Realty businesses • PY revenues included bulk handover of apartments in Parel project • Margin fluctuation due to business mix variation 26.5% EBI
Slide 23: L&T Finance Holdings Group
23 L&T Finance Holdings Group Rs Bn Q1 FY19 Q1 FY20 % Var Income from Operations 30.6 34.6 13% PAT (Net of NCI 3.6 3.5 -2% Mutual Fund Average AUM 711.2 735.0 3% Net Loan Book 863.2 999.0 16% Gross Stage 3 Assets 7.9% 5.7% -220bps Net Stage 3 Assets 3.2% 2.5% -70 bps Networth 119.5 139.9 17% • Stron
Slide 24: Electrical & Automation Segment
24 Electrical & Automation Segment Amount in Rs bn Net Revenue • Revenue growth aided by Standard Products and 6% Meters business • Margin increase reflects operational efficiencies and better realisation 13.3% EBITDA Margin 16.9% E&A is classified as discontinued operations in Financial Statements
Slide 25: Presentation Outline
25 Presentation Outline 01 Group Performance Highlights 02 Group Performance Summary 03 Segment / Key Subsidiaries 04 The Environment & the Outlook
Slide 26: The Environment & the Outlook
The Environment & the Outlook Govt. Policy Macro Drivers PSU Capex Rural Infra Development Financialization of Savings State Govt. Spends Land Acquisition Curr. Account Deficit Liquidity Farm Loan Waivers IBC Consumption trends Inflation ROW Central Govt. Spends Tax Revenues Commodity Prices Bank Re
Slide 27: Thank You
27 Thank You Turn overleaf for Annexures
Slide 28: Segment Margins
28 Segment Margins Amount in Rs Cr Q1 FY20 Q1 FY19 Segment Remarks Net EBITDA Net EBITDA EBITDA EBITDA Revenue % Revenue % Ex-Services business: Infrastructure Segment 13,865 881 6.4% 12,135 830 6.8% Power Segment 561 18 3.3% 1,080 44 4.1% Hydrocarbon Segment 3,763 285 7.6% 3,511 247 7.0% Heavy Engi
Slide 29: Balance Sheet
29 Balance Sheet Incr / Rs Billion June-19 Mar-19 (Decr) Equity & Reserves 640 624 16 Non Controlling Interest 73 68 5 Borrowings - Financial Services 929 915 14 Development Projects 201 191 10 Others 213 149 63 Sources of Funds 2,056 1,948 108 Fixed Assets 127 134 (7) Intangible Assets & Investment
Slide 30: Cash Flow
30 Cash Flow Rs Billion Q1 FY20 Q1 FY19 Operating Profit 37.4 27.9 Changes in Working Capital (66.9) (31.9) Direct Taxes paid (8.7) (9.4) Net Cash from Operations (A) (38.2) (13.4) Net Investment in Fixed Assets (incl. Intangible) (4.5) (6.5) Net (Purchase)/ Sale of Long Term investments (61.4) 3.4
Slide 31: Share in Profit/(Loss) of JVs/Associates
31 Share in Profit/(Loss) of JVs/Associates Rs Bn Q1 FY19 Q1 FY20 MHPS JVs 0.42 0.31 IDPL & Subs. 2.55 (0.72) Special Steels and Heavy Forgings (0.36) (0.37) Others (0.02) 0.08 Total 2.59 (0.69)
Slide 32: Concessions Business Portfolio – 14 SPVs
32 Concessions Business Portfolio – 14 SPVs Transmission Lines: Portfolio: 1 project (482 Km) - Operational Roads and Bridges: Project Cost: Rs 15 bn Portfolio: 10 projects (1048 Km) 10 Operational Project Cost: Rs 108 bn Balance Equity Commitment (June 2019): Rs 8Bn Equity Invested at SPV level (Ju