Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q1 FY2019 Earnings Presentation
31 slides from Larsen & Toubro's earnings presentation, Jul 25, 2018
Slide 1: Analyst Presentation Q1 FY19
Analyst Q1 FY19 Presentation July 25, 2018
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 FY19
4 Performance Highlights –Q1 FY19 +36% +40% +19% +3% +37%
Slide 5: Key Financial Indicators
5 Key Financial Indicators Amount in ₹ bn Particulars Q1 FY18 Q1 FY19 % Var Order Inflow 264 361 37% Revenue from Operations (like-to-like) 238 283 19% EBITDA 21 29 40% PAT 9 12 36% Net Working Capital 20.0% RONW (TTM) (%) 14.6%
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 FY19 Order Inflow/Order Book
7 Q1 FY19 Order Inflow/Order Book Amount in ₹ bn Order Inflow Q1 FY18 Q1 FY19 • Tendering activity strong in domestic market; International 94 opportunities improve 79 264 185 361 • Public sector continues to drive 267 order inflows. Private sector on wait & watch mode Dom Intl Dom Intl • Order Infl
Slide 8: Group Performance – Sales & Costs
8 Group Performance – Sales & Costs ` Billion Q1 FY18 Q1 FY19 % Var • Growth primarily contributed by Infra, Hydrocarbon and services Revenue (like-to-like) 238 283 19% businesses International Revenue % 35% 34% 0% • MCO charge contained through cost optimisation and MCO Exp. 153 173 13% operating e
Slide 9: Group Performance – EBITDA to PAT
9 Group Performance – EBITDA to PAT ` Billion Q1 FY18 Q1 FY19 % Var FY 18 EBITDA 21 29 40% 136 • Services business Fin. Cost (4) (4) 0% (15) drives EBITDA growth • Finance Cost commensurate Depreciation (6) (6) 17% (19) with debt levels Other Income 4 2 -33% 14 • Other income mainly Tax Expense (5)
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 Electrical & Defence Infrastructure Power Engineering Automation Engineering Buildings & Factories (B&F) EPC- Coal & Gas Process Plant Electrical Standard Transportation Infra (TI) Equipment Products Defence Heavy Civil infra (HC) Thermal Power Plant Electrical Systems C
Slide 12: Q1 FY19 Order Inflow Composition
12 Q1 FY19 Order Inflow Composition Hydrocarbon E&A 13.2% HE 3.7% 3.9% Services Power 21.8% 0.3% Others 3.0% Order Inflow ₹ 361 Bn Middle East Defence Engg. 4.0% Infrastructure 0.4% USA & Europe 10.6% 53.7% ROW 11.5% Domestic 74.0%
Slide 13: Q1 FY19 Order Book Composition
13 Q1 FY19 Order Book Composition Power 3.0% HE 1.5% Defence Engg. 4.3% E&A 1.1% Hydrocarbon 10.4% Order Book Others ₹ 2717 Bn 2.2% Middle East 15.1% USA & Europe 0.7% ROW Infrastructure 7.5% 77.5% Domestic 76.7%
Slide 14: Q1 FY19 Revenue Composition
14 Q1 FY19 Revenue Composition E&A 4.5% Services Hydrocarbon 27.9% Defence 12.4% Engg. 2.6% Revenue HE 1.2% ₹ 283 Bn Power 3.8% Others Middle East 4.7% 19.4% USA & Europe 10.4% Infrastructure 42.9% ROW 4.4% Domestic 65.8%
Slide 15: Infrastructure Segment
15 Infrastructure Segment Amount in ₹ bn Net Revenue • MMH reclassified from Others to Infra Segment 10% • Heavy Civil, Water & TI contribute to revenue growth • Revenue expansion led by pick up in execution • Margin reflects stage of execution & job mix 7.1% EBITDA Margin 6.8%
Slide 16: Power Segment
16 Power Segment Amount in ₹ bn Net Revenue • Limited opportunities and aggressive competition in the sector continues to impact order inflows 39% • Revenue decline reflects shrinking domestic order book • International jobs supplement domestic revenues • Margins benefited by ECL writeback on better
Slide 17: Heavy Engineering Segment
17 Heavy Engineering Segment Amount in ₹ bn Net Revenue 29% • Demand for Oil & Gas and Nuclear Power equipment drives revenue growth • Segment benefits from stage of execution and settlement of claims 12.3% EBITDA Margin 36.1%
Slide 18: Defence Engineering Segment
18 Defence Engineering Segment Amount in ₹ bn Net Revenue • Growing Order Book driving Revenue growth 37% • Low utilisation of Shipyard capacity continues to impact segment performance • PY included shipbuilding inventory write down -4.4% EBITDA Margin 11.1%
Slide 19: Electrical & Automation Segment
19 Electrical & Automation Segment Amount in ₹ bn Net Revenue • Like-to-like Revenue growth of 13% after adjusting for Excise Duty (subsumed under GST from July 1, 2017) 13% • Product business contribute to growth • Margin growth led by operational efficiencies & improved realisations in product bus
Slide 20: Hydrocarbon Segment
20 Hydrocarbon Segment Amount in ₹ bn Net Revenue • Tendering activity pick up in domestic & International markets • CY order wins from 39% domestic market • Robust Order Book and efficient execution lead to strong revenue growth • Margin variation due to operational efficiencies & job stage mix 6.8
Slide 21: Developmental Projects Segment
21 Developmental Projects Segment Amount in ₹ bn • Segment includes Power Net Revenue Development business ,Hyderabad Metro & Kattupali Port • Nabha Power revenue enhanced by PLF in CY & non-accrual of washing 81% charges in PY • Hyderabad Metro: Partial CoD of 30Km in Nov 2017 • EBITDA margins posi
Slide 22: IT & Technology Services Segment
22 IT & Technology Services Segment Amount in ₹ bn Net Revenue • Both LTI & LTTS continue their growth momentum • Focus on client mining and product offerings based on Digital & Other 31% new technologies • LTI Q1 revenue growth led by BFS, High-Tech, Media & Entertainment and CPG, Retail & Pharma V
Slide 23: Others Segment
23 Others Segment Amount in ₹ bn Net Revenue • Segment comprises Industrial Products & Machinery (IPM) and Realty business • Lower offtake impacted IPM 53% business • Revenue & Margin growth contributed by Realty business - largely due to Adoption of Completed Contract Method under new Accounting St
Slide 24: L&T Finance Holdings
24 L&T Finance Holdings ` BnQ1 FY18 Q1 FY19 % Var • Strong growth driven by Total Income 24.3 31.8 31% Rural & Housing segments • Focus on increased PAT 3.1 5.4 71% retailisation, stable NIMs, increase in fee based income Mutual Fund Average AUM 444.8 711.2 60% and low credit costs with an overarchi
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 PSU Capex Inflation Central & State Govt. Spends MOAT Multilateral Funding Land Acquisition / ROW Budgetary Allocations Bharatmala / Infra Value Operational Consumption trends thrust Monetisation Excellence Global Protectionist Policies Client Payments & Robust Clearanc
Slide 27: Thank You
27 Thank You Turn overleaf for Annexures
Slide 28: Group Profit & Loss Extracts
28 Group Profit & Loss Extracts Fin. Devl. L&T & L&T Group ` Billion IT & TS Others (Incl. Services Projects Eliminations) Q1 FY19 Q1 FY18 % Var Income from Operations* 33.2 30.6 14.9 204.1 282.8 239.9 18% EBITDA 7.2 7.5 4.7 9.8 29.1 20.8 40% Other Income 1.1 (0.1) (0.2) 1.6 2.4 3.7 -33% Interest Ex
Slide 29: Balance Sheet
29 Balance Sheet Incr / ` Billion Jun-18 Mar-18 (Decr) Equity & Reserves 549 549 0 Non Controlling Interest 55 52 3 Borrowings - Financial Services 772 752 20 Development Projects 184 178 6 Others 146 145 0 Sources of Funds 1,707 1,676 30 Fixed Assets 126 128 (2) Intangible Assets & Investment Prope
Slide 30: Share in Profit/(Loss) of JVs/Associates
30 Share in Profit/(Loss) of JVs/Associates ` Bn Q1 FY19 Q1 FY18 MHPS JVs 0.42 0.44 IDPL & Subs. 2.55 (0.41) Special Steels and Heavy Forgings (0.36) (0.51) Others (0.02) 0.11 Total 2.59 (0.37)
Slide 31: Concessions Business Portfolio – 14 SPVs
31 Concessions Business Portfolio – 14 SPVs Transmission Lines: Portfolio: 1 project (482 Km) - Operational Roads and Bridges: Project Cost: `15 bn Portfolio: 10 projects (1048 Km) 10 Operational Project Cost: `108 bn Balance Equity Commitment (June 2018): ` 8 Bn Equity Invested at SPV level (June 2