Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q2 FY22 Earnings Presentation
47 slides from Larsen & Toubro's earnings presentation, Nov 1, 2021
Slide 1: Investor Presentation – Q2/H1 FY22
LARSEN & TOUBRO Investor Presentation – Q2/H1 FY22 November 01, 2021
Slide 2: Disclaimer
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 number
Slide 3: L&T Overview
01 L&T Overview Dedicated Water Supply Project, Tamil Nadu 3 3
Slide 4: L&T – At a Glance
L&T – At a Glance India’s largest E&C company with interests in EPC Projects, Hi- Tech Manufacturing and Services. Revenues Credit Rating Market Capitalization A Professionally ₹1,360Bn CRISIL: AAA / Stable ₹ 2507Bn Managed Corporate ICRA: AAA (Stable) FY 21 Group 27th Oct, 2021 (approx. Group (appr
Slide 5: L&T – Shareholding Pattern
L&T – Shareholding Pattern Others, 6% Govt. Financial Mutual Funds Institutions & & Pvt. Insurance Insurance Companies, Cos., 18% 16% 30th Sep, Major Institutional Shareholders % Shares L&T 2021 Employee Life Insurance Corporation of India 12.6% Trust, FII's & GDR, 24% HDFC Mutual Fund 2.4% 14% GIC
Slide 6: Experienced Management Team
Experienced Management Team 1 2 3 4 5 6 7 8 9 A M Naik S. N. Subrahmanyan R Shankar Raman D. K. Sen M. V. Satish J.D. Patil Subramanian S.V. Desai T.Madhava Das Group Chairman Chief Executive Whole-time Whole-time Director Whole-time Director & Sr. Whole-time Director & Sarma Whole-Time Whole-Time O
Slide 7: Business Overview
02 — - Business i= lew! Overview : “aad Pmt soo? Ta EPC PROJECTS | HI-TECH MANUFACTURING | SERVICES © LARSEN & TOUBRO
Slide 8: Builders to the Nation
Builders to the Nation Statue of Unity, Gujarat 330 MWp Solar PV project, MP 172 MLD Water Treatment Plant, Barmer Western Dedicated Freight Corridor Kempegowda International Airport FCC Reactor Regenerator Section, Paradip AIIMS, Bhubaneshwar Baha’i Temple, Delhi Mumbai High North Complex Island Ci
Slide 9: International Footprint
International Footprint Sewage Treatment Plant, Qatar Hasbah II, Saudi Arabia Twin Towers, Dubai Marina Cryostat for ITER project 400 kV Ibri-Izki Transmission Line, Oman Light Rail Transit System, Mauritius Al Batinah Expressway Interchange, Oman 225 MW Combined Cycle Power Plant, Bangladesh LTI’s
Slide 10: Value creating Integrated Business Model
Design & Engineering Fabrication & Financial Services Construction Value creating EPC Projects Integrated Business Model IT, Engineering & Realty & Infrastructure Technology Services Development Hi Tech Manufacturing
Slide 11: EPC Projects – E&C Delivery Platform
E&C Delivery Platform One of Asia’s largest vertically integrated E&C Companies Design & Engineering EPC PROJECTS Construction Manufacture & Fabrication Single point responsibility for turnkey solutions
Slide 12: Quality Customer Mix
Quality Customer Mix Indian Coastguard 12
Slide 13: Multiple Alliances & Joint Ventures
Multiple Alliances & Joint Ventures Alliances Pre Qualifications Joint Ventures Befula Investments Note: Some of these are project specific alliances & pre qualifications 13
Slide 14: Rewards and Recognitions
Rewards and Recognitions L&T Hydrocarbon Engineering was ranked as the ‘Top EPC Contractor in the Middle East’ by Oil & Gas L&T won the ‘Future of Work Middle East magazine for 2021 Disruptor’ award in the large enterprise category at the Mint W3 2021 Awards
Slide 15: L&T’s Business Structure
L&T’s Business Structure LARSEN & TOUBRO Business verticals Subsidiaries, JVs & Associates Buildings & Factories L&T Hydrocarbon Engineering* Transportation Infrastructure Financial Services Heavy Civil Infrastructure IT & Technology Services Water & Effluent Treatment Infrastructure SPVs (BOTs) Pow
Slide 16: Key Highlights
03 Key Highlights Rishikesh-Karnaprayag Rail Link Package 2 16 16
Slide 17: Striking a balance between Profitable Growth & Capital Employed
Striking a balance between “Profitable Growth” & “Capital Employed” This far……and beyond Delay in awards Order Book at finalization despite near record robust tendering high levels activity EBITDA margin Focus on “profitable improves on better Return ratios being execution” and overhead recovery pur
Slide 18: Key Financial Indicators
Key Financial Indicators (Amount in ₹ bn) % Var % Var % Var Q2 FY21 Q1 FY22 Q2 FY22 Particulars H1FY21 H1FY22 (y-o-y) (q-o-q) (y-o-y) 280 266 421 50% 59% Order Inflow 516 687 33% Order Book 2989 3305 11% 310 293 348 12% 19% Revenue 523 641 23% 10.7% 10.8% 11.5% EBITDA (%) 9.5% 11.2% 11 12 17 56% 47%
Slide 19: Group Performance
04 Group Performance Project under construction in Colombo 19
Slide 20: Q2/H1 FY22 Order Inflow/Order Book
Q2/H1 FY22 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book 50% 33% 11% H1FY22 716 Q2 FY21 Q2 FY22 758 200 221 421 375 312 687 2989 3305 H1FY21 516 2273 2547 178 102 280 326 190 H1FY21 H1FY22 Domestic International • Q2 Order Inflows from Hydrocarbon, Infrastructure, Heavy Engineerin
Slide 21: Group Performance – Sales & Costs
Group Performance – Sales & Costs Q2 Q2 H1 H1 % Var Rs Billion % Var • Projects & Manufacturing and IT&TS FY21 FY22 FY21 FY22 businesses drive revenue growth 310.3 347.7 12% Revenue 522.9 641.1 23% • MCO expense variation is reflective of job progress, revenue mix and higher input 39% 35% Internatio
Slide 22: Group Performance – Profit Parameters
Group Performance – Profit Parameters Q2 Q2 H1 H1 % Var Rs Billion % Var • Finance cost commensurate with reduced FY21 FY22 FY21 FY22 level of borrowing at parent 33.3 39.9 20% EBITDA 49.6 71.7 45% • Other income reflective of level of treasury (10.4) (7.8) -25% Fin. Cost (21.0) (16.1) -23% investme
Slide 23: Segment Performance Analysis
05 Segment Performance Analysis Provided Critical subsystems for most of India’s space missions 23 23
Slide 24: Segment Composition
Segment Composition Heavy Defence Hydrocarbon Others Infrastructure Power Engineering (HE) Engineering Buildings & Factories (B&F) EPC- Coal & Gas Process Plant Equipment Defence Onshore Realty Transportation Infra (TI) Thermal Power Plant Nuclear Power Plant Aerospace Offshore Industrial Products &
Slide 25: Order Inflow Composition
Order Inflow Composition Q2 FY22 Rs 421 Bn H1 FY22 Rs 687 Bn HE, 2% Defence, 1% Power, 2% HE, 2% Defence, 1% Power, 0.3% Hydrocarbon, Hydrocarbon, 34% Services, 34% 23% Services, 29% Others, 5% Others, 4% Infrastructure, Infrastructure, 29% 34% Middle Middle East, 23% East, 33% USA & USA & Europe, E
Slide 26: Order Book Composition as on 30-Sep-21
Order Book Composition as on 30-Sep-21 Power, 4% HE, 1% Defence, 2% Middle East, 15% Hydrocarbon, 15% USA & Europe, Infrastructure, Domestic, 77% 1% 74% Others, 4% ROW, 7% Order Book Rs 3305 Bn EPC Projects Hi- Tech Manufacturing Services 26 26 26
Slide 27: Revenue Composition
Revenue Composition Q2 FY22 Rs 348 Bn H1 FY22 Rs 641 Bn Power, 3% HE, 2% Power, 3% HE, 2% Defence, 2% Defence, 2% Services, 35% Hydrocarbon, Services, 37% Hydrocarbon, 14% 14% Infrastructure, Others, 4% Infrastructure, Others, 4% 40% 38% Middle Middle East, 9% USA & East, 9% USA & Europe, Europe, 20
Slide 28: Infrastructure Segment
Infrastructure Segment Net Revenue -7% 7% 26% Net Revenue -7% (Amount in ₹ bn) 129.7 139.2 193.6 243.3 H1 FY21 H1 FY22 Q2 FY21 Q2 FY22 6.4% EBITDA Margin 8.3% 6.3% EBITDA Margin 7.8% Domestic International • Robust new order announcements and tendering activity; some delays in awards finalization •
Slide 29: Power Segment
Power Segment Net Revenue -7% 62% Net Revenue -7% 77% (Amount in ₹ bn) 11.1 10.6 18.7 6.9 H1 FY21 H1 FY22 Q2 FY21 Q2 FY22 3.1% EBITDA Margin 2.7% 2.4% EBITDA Margin 2.6% Domestic International • Subdued ordering environment continues • Large opening order book drives healthy execution • Margin refle
Slide 30: Heavy Engineering Segment
Heavy Engineering Segment Net Revenue -7% 4% Net Revenue -7% 20% (Amount in ₹ bn) 6.0 6.2 9.8 11.7 Q2 FY21 H1 FY21 H1 FY22 Q2 FY22 5.1% EBITDA Margin 15.7% 9.9% EBITDA Margin 16.7% Domestic International • Multiple order wins in Refinery, Oil & Gas vertical • Job specific challenges & slower executi
Slide 31: Defence Engineering Segment
Defence Engineering Segment Net Revenue -7% 10% Net Revenue -7% 24% (Amount in ₹ bn) 8.4 7.6 12.4 15.3 Q2 FY21 Q2 FY22 H1 FY21 H1 FY22 24.4% EBITDA Margin 13.7% 20.0% EBITDA Margin 16.7% Domestic International • Order inflows impacted due to award deferrals • Jobs progress drives revenue in Q2 • Mar
Slide 32: Hydrocarbon Segment
Hydrocarbon Segment Net Revenue -7% 20% Net Revenue 27% (Amount in ₹ bn) 48.7 40.4 71.1 90.6 Q2 FY21 Q2 FY22 H1 FY21 H1 FY22 8.5% EBITDA Margin 8.3% 7.1% EBITDA Margin 8.9% Domestic International • Receipt of a high value international order buoys order book • Peaking of execution activity in onshor
Slide 33: Developmental Projects Segment
Developmental Projects Segment Net Revenue -7%3% Net Revenue -7% 36% (Amount in ₹ bn) 11.7 16.9 23.0 11.4 Q2 FY21 Q2 FY22 H1 FY21 H1 FY22 5.3% EBITDA Margin 4.1% 5.8% EBITDA Margin 1.9% Power Development Hyd Metro • Segment includes Power Development business (Thermal & Hydel up to the date of dives
Slide 34: IT & Technology Segment
IT & Technology Segment Net Revenue -7% 28% Net Revenue -7% 24% (Amount in ₹ bn) 78.8 121.9 151.0 61.7 H1 FY21 H1 FY22 Q2 FY21 Q2 FY22 23.2% EBITDA Margin 23.3% 21.9% EBITDA Margin 23.2% LTI LTTS Mindtree • LTI revenue growth led by Hi-Tech, Media & Entertainment, BFS and Manufacturing • Mindtree re
Slide 35: Others Segment
Others Segment 4% Net Revenue -7% Net Revenue -7% 33% (Amount in ₹ bn) 13.2 13.8 20.3 27.1 Q2 FY21 H1 FY21 H1 FY22 Q2 FY22 18.0% EBITDA Margin 20.8% 14.1% EBITDA Margin 18.1% Domestic International • Segment comprises Realty, Industrial Machinery, Valves and Smart World & Communications • Strong rev
Slide 36: Financial Services Segment
Financial Services Segment (Amount in ₹ bn) Q2 Q2 H1 H1 % Var Rs Bn % Var FY21 FY22 FY21 FY22 33.4 29.8 -11% Income from Operations 66.3 60.4 -9% 2.7 2.2 -15% Reported PAT 4.1 4.0 -3% 1.7 1.4 -16% PAT (Net of NCI) accruing to the group 2.6 2.5 -4% Mutual Fund Average AUM 630.6 782.7 24% Book 988.2 8
Slide 37: Environment & Outlook
06 Environment & Outlook EPC Projects Hi- Tech Manufacturing Services 37
Slide 38: India’s current decade of inclusive growth
India’s current decade of inclusive growth Profitable Last Decade Overlap Period Current Decade Growth The Clean up & Reforms India’s “Make” Decade Higher Cash The Booster Dose Sustainability Journey could witness.. L&T’s Generation Focus • Demonetization • Direct Tax cuts • Capex Resurgence Areas •
Slide 39: ESG Disclosures
07 ESG Disclosures Sustainable Sustainable progress fora a progress for better world better world EPC Projects Hi- Tech Manufacturing Services 39
Slide 40: Early movers in reporting
Early movers in reporting 2015 2014 2013 2012 2011 2021 2010 2009 2008 Under Released on 21st completion and October 2021 audit 2019 2020 2018 2021 2017 2016 Link: Integrated Report | L&T Corporate (lntsustainability.com) FY21 Integrated Report is the 14th consecutive year of sustainability disclosu
Slide 41: Sustainability Awards and Recognition Commitments
Sustainability Awards and Recognition Commitments Carbon Neutral 2040 Ranked No.1 in Engineering & Capital Goods Received the ‘Grant Thornton Sector as per Crisil ESG rating in Bharat SABERA Award’ for 'Best Water Neutral India(Overall Rank 22) Integrated Reporting’ in Dec 2020 2035 Thrust Areas Ene
Slide 42: Thank You
Thank You Investor Relations: P Ramakrishnan (P.Ramakrishnan@larsentoubro.com) Harish Barai (Harish.Barai@larsentoubro.com) Shalmali Dange (Shalmali.Dange@larsentoubro.com) EPC Projects Hi- Tech Manufacturing Services42 42
Slide 43: Balance Sheet
Balance Sheet Rs Billion Mar-21 Sep-21 Incr / (Decr) Equity & Reserves 759 765 7 Non Controlling Interest 121 126 6 Borrowings - Financial Services 865 827 -37 Development Projects 206 185 -21 Others 255 238 -17 Sources of Funds 2205 2142 -63 Fixed Assets (incl ROU assets) 138 131 -7 Intangible Asse
Slide 44: Cash Flow
Cash Flow Q2 FY21 Q1 FY22 Q2 FY22 Rs Bn H1FY21 H1FY22 35.2 33.6 41.9 Operating Profit 53.3 75.5 (1.2) (34.7) 12.2 Changes in Working Capital [(Inc)/Dec] (5.0) (22.4) (6.8) (6.9) (13.8) Direct Taxes (Paid) / Refund [Net] (11.8) (20.7) 27.3 (7.9) 40.4 Net Cash from / (used in) Operations (A) 36.5 32.4
Slide 45: Segment Margin – Q2 FY22
Segment Margin – Q2 FY22 Q2FY21 Q2FY22 Segment (Rs Cr) EBITDA EBITDA Net Revenue EBITDA Net Revenue EBITDA % % Infrastructure Segment 12969 825 6.4% 13923 1152 8.3% Power Segment 687 21 3.1% 1114 30 2.7% Hydrocarbon Segment 4044 343 8.5% 4867 402 8.3% Heavy Engineering Segment 601 30 5.1% 624 98 15.
Slide 46: Segment Margin – H1 FY22
Segment Margin – H1 FY22 H1FY 21 H1FY 22 Segment (Rs Cr) EBITDA EBITDA Net Revenue EBITDA Net Revenue EBITDA % % Infrastructure Segment 19363 1225 6.3% 24332 1888 7.8% Power Segment 1061 25 2.4% 1873 49 2.6% Hydrocarbon Segment 7105 507 7.1% 9057 804 8.9% Heavy Engineering Segment 979 97 9.9% 1173 1
Slide 47: Share in Profit/(Loss) of JVs/Associates
Share in Profit/(Loss) of JVs/Associates Q2 FY21 Q2 FY22 Rs Bn H1 FY21 H1 FY22 0.39 0.43 L&T Power JVs 0.54 0.73 (0.52) (0.26) L&T IDPL Group JVs (1.15) (0.71) (0.32) - L&T Special Steels and Heavy Forgings JV (0.73) - (0.07) (0.17) Others (incl associates) (0.20) (0.26) (0.53) 0.01 Total (1.54) (0.