Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q1 FY24 Earnings Presentation
33 slides from Larsen & Toubro's earnings presentation, Jul 25, 2023
Slide 1: Exchange filing cover letter: Analyst Presentation Q1 / FY24
8 LARSEN & TOUBRO Larsen & Toubro Limited Secretarial Department L&T House, Ballard Estate Narottam Morarjee Marg Mumbai - 400 001, INDIA Tel: +91 22 6752 5656 Fax: +91 22 6752 5858 www.Larsentoubro.com SEC/2023 July 25, 2023 BSE Limited National Stock Exchange of India Limited Phiroze Jejeebhoy Tow
Slide 2: Earnings Call Presentation Q1 / FY24
Earnings Call Presentation Q1 / FY24 25th July, 2023
Slide 3: Disclaimer
Rejeuve 360, Mulund (Representative Image) This presentation contains certain forward looking statements concerning L&T’s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such f
Slide 4: Key Highlights
Key Highlights ONGC Pipeline Replacement Project VII 3
Slide 5: Growth on fast track
Growth on fast track..... Robust top line & Order Inflows Revenue PAT bottom line growth 57% 34% 46% ₹ 65,520 crore ₹ 47,882 crore ₹ 2,493 crore Balance Sheet NWC / Revenue# Return on Equity # ROE% management & improved 17.0% 12.8% up 60 bps vs Mar’23 Return Ratios #TTM Returning surplus cash to sha
Slide 6: Key Financial Indicators
Key Financial Indicators (Amount in ₹ bn) Q1 FY23 Particulars Q1 FY24 (y-o-y) 418 Order Inflow 655 57% 3609 Order Book 4126 14% 359 Revenue 479 34% 11.0% EBITDA (%) 10.2% 17 Recurring PAT 25 46% 17 Overall PAT 25 46% 20.6% Net Working Capital 17.0% 11.5% ROE (TTM) (%) 12.8% 5
Slide 7: Group Performance
Group Performance Delhi Airport Phase 3A expansion project 6
Slide 8: Q1 / FY24 Order Inflow/Order Book
Q1 / FY24 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book 57% 14% Q1 FY23 Q1 FY24 379 276 655 1008 1206 3609 4126 240 178 418 2920 2601 Q1 FY23 Q1 FY24 Domestic International • Strong awarding momentum across India and GCC in Q1 • Robust prospects pipeline @ ₹ 10 trillion for balanc
Slide 9: Group Performance – Sales & Costs
Group Performance – Sales & Costs ₹ Billion Q1 FY23 Q1 FY24 % Var Revenue 358.5 478.8 34% • Strong execution momentum in Projects and Manufacturing portfolio on the back of large International Rev. 37% 40% opening order book MCO Exp.* 195.3 293.2 50% • MCO expense variation is reflective of activity
Slide 10: Group Performance – Profit Parameters
Group Performance – Profit Parameters ₹ Billion Q1 FY23 Q1 FY24 % Var • Finance cost commensurate with level and price of borrowing EBITDA 39.5 48.7 23% • Other income reflective of level of treasury Fin. Cost (7.6) (8.5) 13% investments & improved yields during the quarter Depreciation (9.6) (8.3)
Slide 11: Segment Performance Highlights
Segment SegmentPerformance Performance Highlights Highlights Chandrayaan 3: L&T manufactured critical booster segments, namely head end segment, middle segment and nozzle bucket flange for Chandrayaan 3 10
Slide 12: Segment Composition
Segment Composition Infrastructure Energy Projects IT & TS Others Projects Buildings & Factories Buildings & Factories Hydrocarbon Buildings LTIMindtree LTI & Factories + Mindtree Buildings & Factories Realty LTTS Smart World & Power Heavy Civil Communications* Digital Platforms Platforms Green EPC
Slide 13: Order Inflow Composition – Q1 / FY24
Order Inflow Composition – Q1 / FY24 Segment Geography Energy, 11% Middle East, 23% Hi-Tech Manufacturing, 2% Others, 3% USA & Europe, 14% Services, 23% Infrastructure, 61% Domestic, 58% ROW, 5% Order Inflow : ₹ 655 Bn 12
Slide 14: Order Book Composition – Q1 / FY24
Order Book Composition – Q1 / FY24 Segment Geography Energy, 18% Middle East, 25% Hi-Tech Manufacturing, 6% USA & Europe, 1% Infrastructure, Domestic, 71% 73% Others, 3% ROW, 3% Order Book : ₹ 4126 Bn 13
Slide 15: Revenue Composition – Q1 / FY24
Revenue Composition – Q1 / FY24 Segment Geography Middle East, 16% Hi-Tech Others, 4% Manufacturing, 4% Energy, 14% Services, 32% USA & Europe, 20% Infrastructure, 46% Domestic, 60% ROW, 4% Revenue : ₹ 479 Bn 14
Slide 16: Infrastructure Projects Segment
Infrastructure Projects Segment (Amount in ₹ bn) Net Revenue: 56% 141.8 220.6 11.4 11.4 26.9 50.2 114.9 170.4 Q1 FY23 Q1 FY24 Domestic DomesticInternational Q1 FY24 6.5% EBITDA Margin 5.1% • Robust domestic & international ordering momentum in Q1 • Prospect pipeline reflective of capex tailwinds acr
Slide 17: Energy Projects Segment
Energy Projects Segment (Amount in ₹ bn) Net Revenue: 32% 50.7 66.8 11.4 11.4 15.1 32.4 34.4 35.6 Q1 FY23 Q1 FY24 Domestic DomesticInternational Q1 FY24 8.5% EBITDA Margin 9.1% • Receipt of both domestic & international orders buoys Hydrocarbon order book; muted order inflows in Power business • Pic
Slide 18: Hi-Tech Manufacturing Segment
Hi-Tech Manufacturing Segment (Amount in ₹ bn) Net Revenue: 40% 12.7 17.8 11.4 11.4 2.4 6.6 11.2 10.3 Q1 FY23 Q1 FY24 Domestic DomesticInternational 15.1% EBITDA Margin 16.8% • Order inflows impacted by deferrals in Heavy Engineering & Defence • Healthy execution momentum across both businesses • Ex
Slide 19: IT & Technology Services Segment
IT & Technology Services Segment (Amount in ₹ bn) Net Revenue: 14% 95.6 108.5 11.4 11.4 19.7 22.0 75.8 86.5 Q1 FY23 Q1 FY24 LTIMindtree Domestic LTTS 21.9% EBITDA Margin 20.6% • LTIMindtree revenue growth led by Manufacturing & Resources and BFSI • LTTS revenue growth led by Transportation and Indus
Slide 20: Financial Services Segment: Fintech@Scale
Financial Services Segment Fintech@Scale ₹ Bn Q1 FY23 Q1 FY24 % Var Income from Operations 29.6 30.2 2% Reported PAT 2.6 5.3 >100% PAT (Net of NCI) accruing to the group 1.7 3.5 >100% Book 880.8 785.7 -11% Poised to achieve Lakshya goals ahead of FY26 Retailisation Retail Book Growth Retail Asset Qu
Slide 21: Development Projects Segment
Development Projects Segment (Amount in ₹ bn) Net Revenue: 4% 13.5 12.9 11.4 11.4 1.6 2.1 11.9 10.8 Q1 FY23 Q1 FY24 Q1 FY24 Domestic Power Development Hyd Metro 4.5% EBITDA Margin 15.8% • Segment includes Hyderabad Metro and Power Development (Nabha Power) • Improved ridership aids revenue growth in
Slide 22: Others Segment
Others Segment (Amount in ₹ bn) Net Revenue: 50% 14.7 22.0 11.4 11.4 1.0 1.0 13.7 21.0 Q1 FY23 Q1 FY24 Domestic DomesticInternational 18.6% EBITDA Margin 18.6% • Segment comprises Realty, Industrial Valves, Construction Equipment & Mining Machinery, Rubber Processing Machinery and Smart World & Comm
Slide 23: Could this be India's Decadal moment?
Could this be India’s “Decadal” moment? GST Implementation Top Quartile Real GDP FY23 Capex Digitalizing Growth 7.2% social transfers Demonetization (FY23) Centre Incentives for RERA Act Anchored Inflation ₹ 7.4 trn manufacturing CPI @ 4.8% (Jun’23) India’s States* transformation Resulting in & Supp
Slide 24: ESG Update
ESG Update ~ era EPC PROJECTS | HI-TECH MANUFACTURING | SERVICES
Slide 25: Environment
Environment Target – FY26 Performance – FY23 Revenue from Green Business Committed to achieve Carbon Neutrality: 2040 37% in FY23 (vs 34.7% in FY22) 25% 889 tCO2e / ₹ Bn Emission intensity reduction Emission intensity (Scope 1 & 2) (892 tCO2e / ₹ Bn in FY22) FY21 (Base year) – 867 tCO2e / Rs bn 50%
Slide 26: Social
Social Health & Safety Diversity & Inclusion Safety Training & Gender Diversity 30% Theme based Women GETs/ PGETs of Campaigns to spread 10.0% (Target) total hires awareness 6.0% 6.2% 7.8% 200+ Regular safety Women underwent performance review EHS Council est.in 2020 chaired by Board Leadership Jour
Slide 27: Governance
Governance Sustainability: Governance Structure Key Policies • Sustainability Policy EHS Council, Material Council, Green Campus Task Force etc Corporate Secretarial, Human Resources, CSR, Supply Chain CSR Board Committee • Green Supply Chain Policy • EHS Policy • CSR Policy • Equal Opportunity Poli
Slide 28: Thank You
Thank You Investor Relations: P Ramakrishnan (P.Ramakrishnan@larsentoubro.com) Harish Barai (Harish.Barai@larsentoubro.com) Shalmali Dange (Shalmali.Dange@larsentoubro.com) 27
Slide 29: Balance Sheet
Balance Sheet ₹ Billion Mar-23 Jun-23 Incr / (Decr) Equity & Reserves 893 920 27 Non Controlling Interest 142 150 8 Borrowings - Financial Services 820 743 -77 Development Projects 179 173 -6 Others 187 215 28 Sources of Funds 2221 2201 -20 Fixed Assets (incl ROU assets) 164 168 4 Intangible Assets
Slide 30: Cash Flow
Cash Flow ₹ Billion Q1 FY23 Q1 FY24 Operating Profit 42.7 52.0 Changes in Working Capital [(Inc)/Dec] (41.2) (50.3) Direct Taxes (Paid) / Refund [Net] (10.7) (11.6) Net Cash from / (used in) Operations (A) (9.2) (9.9) Net Investment in Fixed Assets (incl. Intangible & Investment Property) (8.4) (6.3
Slide 31: Segment Margin – Q1 FY24
Segment Margin – Q1 FY24 Q1 FY23 Q1 FY24 Segment (₹ Crore) EBITDA EBITDA Net Revenue EBITDA Net Revenue EBITDA % % Infrastructure Projects Segment 14181 919 6.5% 22058 1117 5.1% Energy Projects Segment 5073 432 8.5% 6682 608 9.1% Hi-Tech Manufacturing Segment 1272 192 15.1% 1781 299 16.8% Others Seg
Slide 32: Breakup of Energy and Hi-Tech Manufacturing Segment
Breakup of Energy and Hi-Tech Manufacturing Segment ₹ Bn Q1 FY23 Q1 FY24 Y-o-Y Energy Segment 43.7 72.4 66% Order Inflow Hydrocarbon 41.8 70.2 68% Power 1.9 2.2 18% Energy Segment 50.7 66.8 32% Energy Segment Revenue Hydrocarbon 40.6 59.4 46% Power 10.1 7.4 -27% Energy Segment 8.5% 9.1% 0.6% EBITDA
Slide 33: Share in Profit/(Loss) of JVs/Associates
Share in Profit/(Loss) of JVs/Associates ₹ Bn Q1 FY23 Q1 FY24 L&T Power JVs (0.03) (0.12) L&T IDPL Group* (0.20) (0.00) Others** (0.41) (0.08) Total (0.65) (0.21) * Profit consolidation of L&T IDPL at PAT level has been discontinued from Q4FY23, post signing of definitive agreement for sale of stake