Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q2 FY20 Earnings Presentation
33 slides from Larsen & Toubro's earnings presentation, Oct 23, 2019
Slide 1: Analyst Presentation Q2/H1 FY20
LARSEN & TOUBRO Analyst Presentation Q2/H1 FY20 October 23, 2019 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: 01 Group Performance Highlights
01 Group Performance Highlights Engineering Manufacturing Construction Projects Technology Financial Services 3
Slide 4: Performance Highlights – Q2 FY20
Performance Highlights – Q2 FY20 Order Inflow +20% Recurring PAT Order Book +24% Rs 3.03 Tn EBITDA Revenue +14% +15% Engineering Manufacturing Construction Projects Technology Financial Services 4
Slide 5: Key Financial Indicators
Key Financial Indicators (Amount in ₹ bn) Q2 FY19 Q2 FY20 % Var Particulars H1 FY19 H1 FY20 % Var 403 483 20% Order Inflow 751 870 16% Order Book 2782 3032 9% 307 353 15% Revenue 577 650 13% 35 40 14% EBITDA 63 71 13% 22 25 13% Reported PAT 34 40 16% Net Working Capital 20% 23% RONW (TTM) (%) 15.2%
Slide 6: 02 Group Performance Summary
02 Group Performance Summary Engineering Manufacturing Construction Projects Technology Financial Services 6
Slide 7: Q2/H1 FY20 Order Inflow/Order Book
Q2/H1 FY20 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book 20% 16% 9% H1 FY19 H1 FY20 Q2 FY19 Q2 FY20 598 671 316 167 483 613 257 870 2782 3032 324 79 403 581 170 751 2185 2361 H1 FY19 H1 FY20 Domestic International • Growth in Order Inflows obtained from International business • Pr
Slide 8: Group Performance – Sales & Costs
Group Performance – Sales & Costs Q2 Q2 H1 H1 • Q2 revenue growth driven by % Var Rs Billion % Var FY19 FY20 FY19 FY20 Infra, Hydrocarbon and IT&TS 306.8 353.3 15% Revenue 576.8 649.6 13% businesses 33% 34% 1% International Rev. 34% 33% -1% • Fin charge opex is consequent on larger debt 192.0 208.6
Slide 9: Group Performance – EBITDA to PAT
Group Performance – EBITDA to PAT Q2 Q2 H1 H1 % Var Rs Billion % Var FY19 FY20 FY19 FY20 35.4 40.2 14% EBITDA 63.0 70.9 13% • Finance cost commensurate with debt levels and phased (4.0) (6.9) 72% Fin. Cost (7.6) (12.7) 67% commencement of Hyd. Metro (4.8) (6.3) 32% Depreciation (10.8) (10.9) 1% • Hi
Slide 10: Income Tax Expense
Income Tax Expense The Parent Company and some of the subsidiaries have computed the tax expense of the current financial year as per the tax regime announced under section 115BAA of the Income Tax Act, 1961. Accordingly, a) The provision for current and deferred tax has been determined at the rate
Slide 11: 03 Segment / Key Subsidiaries
03 Segment / Key Subsidiaries Engineering Manufacturing Construction Projects Technology Financial Services 11
Slide 12: 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 13: H1 FY20 Order Inflow Composition
H1 FY20 Order Inflow Composition Others ROW USA & Europe 4% 4% 11% Infrastructure 38% Services 22% Middle East 15% Hydrocarbon 21% Domestic Defence 70% HE Power Engineering 1% 13% 1% Order Inflow Rs 870 Bn Engineering Manufacturing Construction Projects Technology Financial Services 13
Slide 14: H1 FY20 Order Book Composition
H1 FY20 Order Book Composition USA & ROW Hydrocarbon Others Europe 8% 17% 2% 1% Defence Engineering Middle 4% East 13% HE 1% Power 5% Infrastructure Domestic 71% 78% Order Book Rs 3032 Bn Engineering Manufacturing Construction Projects Technology Financial Services 14
Slide 15: H1 FY20 Revenue Composition
H1 FY20 Revenue Composition ROW Others USA & Europe 5% Infrastructure 4% 14% 47% Services 30% Middle East 14% Hydrocarbon 12% Domestic Defence 67% Engineering HE Power 3% 2% 2% Revenue Rs 650 Bn Engineering Manufacturing Construction Projects Technology Financial Services 15
Slide 16: Infrastructure Segment
Infrastructure Segment (Amount in ₹ bn) Net Revenue 9% Net Revenue 11% 165.9 152.2 H1 FY19 H1 FY20 6.8% EBITDA Margin 7.1% 6.8% EBITDA Margin 6.8% Domestic International • Public sector continues to drive Order Inflows • Strong domestic revenue growth on robust order book conversion • Margins reflec
Slide 17: Power Segment
Power Segment (Amount in ₹ bn) Net Revenue 54% Net Revenue 51% 10.6 3.9 4.8 1.0 6.7 3.8 H1 FY19 H1 FY20 Q2 FY19 Q2 FY20 6.0% EBITDA Margin 4.2% 5.0% EBITDA Margin 3.7% Domestic International • Strong order inflows in H1 replenishes order book • Revenue decline reflects depleted opening order book •
Slide 18: Heavy Engineering Segment
Heavy Engineering Segment (Amount in ₹ bn) Net Revenue 33% Net Revenue 87% 6.2 4.7 H1 FY19 H1 FY20 24.2% EBITDA Margin 24.9% 29.1% EBITDA Margin 21.7% Domestic International • Q2 Order Inflows impacted by deferments • Strong revenue growth driven by large opening Order Book • Global competence, tech
Slide 19: Defence Engineering Segment
Defence Engineering Segment (Amount in ₹ bn) Net Revenue 9% Net Revenue 20% 10.2 9.3 H1 FY19 H1 FY20 25.0% EBITDA Margin 17.9% 18.9% EBITDA Margin 17.2% Domestic International • Current policy continues to inhibit private sector participation • Execution of tracked artillery gun order continues to d
Slide 20: Hydrocarbon Segment
Hydrocarbon Segment (Amount in ₹ bn) Net Revenue 21% Net Revenue 14% 43.0 35.4 H1 FY19 H1 FY20 9.9% EBITDA Margin 12.5% 8.5% EBITDA Margin 10.2% Domestic International • Significant Order Inflows obtained from domestic & international markets • Strong revenue growth on the back of large opening Orde
Slide 21: Developmental Projects Segment
Developmental Projects Segment (Amount in ₹ bn) Net Revenue 12% Net Revenue 6% 14.5 13.0 H1 FY19 H1 FY20 4.3% EBITDA Margin 10.2% 18.3% EBITDA Margin 10.1% Nabha Hyd. Metro Kattupalli Port • Segment includes Power Development business, Hyderabad Metro • Revenue largely contributed by Power Developme
Slide 22: IT & Technology Services Segment
IT & Technology Services Segment (Amount in ₹ bn) Net Revenue 64% Net Revenue 41% 58.8 35.7 H1 FY19 H1 FY20 24.1% EBITDA Margin 19.5% 24.5% EBITDA Margin 21.0% IT TS Mindtree • Mindtree results consolidated in Q2 • LTI revenue growth led by Manufacturing and Energy & Utilities • LTTS revenue growth
Slide 23: Others Segment
Others Segment (Amount in ₹ bn) Net Revenue 7% Net Revenue 4% 15.4 14.5 H1 FY19 H1 FY20 23.1% EBITDA Margin 21.8% 24.7% EBITDA Margin 22.8% Domestic International • Segment comprises Construction & Mining Equipment, Rubber processing Machinery, Industrial Valves and Realty businesses • Q2 revenue gr
Slide 24: L&T Finance Holdings Group
L&T Finance Holdings Group Q2 FY19 Q2 FY20 % Var Rs Bn H1 FY19 H1 FY20 % Var 32.2 36.1 12% Income from Operations 63.3 72.1 14% 3.9 1.1 -71% PAT (Net of NCI) 7.4 4.6 -38% Mutual Fund Average AUM 737.5 692.1 -6% Net Loan Book 912.0 1,002.6 10% Gross Stage 3 Assets 7.1% 6.0% Net Stage 3 Assets 2.8% 2.
Slide 25: Electrical & Automation Segment
Electrical & Automation Segment (Amount in ₹ bn) Net Revenue 1% Net Revenue 4% 14.0 14.2 H1 FY19 H1 FY20 17.8% EBITDA Margin 18.2% 15.6% EBITDA Margin 17.6% Domestic International • Flat revenue growth in a soft demand environment • Margin increase reflects operational efficiencies and better realis
Slide 26: 04 The Environment & Outlook
04 The Environment & Outlook 26 Engineering Manufacturing Construction Projects Technology Financial Services
Slide 27: The Environment & the Outlook
The Environment & the Outlook Nominal GDP Growth Order Public Sector Book Investments Balance Global Sheet Outlook Growth Business Economic Portfolio Stimulus Capability Spectrum Engineering Manufacturing Construction Projects Technology Financial Services 27
Slide 28: Thank You
Thank You Turn overleaf for Annexures
Slide 29: Segment Margin
Segment Margin H1 FY20 H1 FY19 Segment EBITDA EBITDA Net Revenue EBITDA Net Revenue EBITDA (Rs. (Rs. (Rs. Crore) % (Rs. Crore) % Crore) Crore) Ex-Services business: Infrastructure Segment 30455 2061 6.8% 27359 1871 6.8% Power Segment 1045 39 3.7% 2139 107 5.0% Hydrocarbon Segment 8065 822 10.2% 7054
Slide 30: Balance Sheet
Balance Sheet Incr / Rs Billion Sep-19 Mar-19 (Decr) Equity & Reserves 633 624 9 Non Controlling Interest 91 68 23 Borrowings - Financial Services 890 915 (25) Development Projects 197 191 6 Others 242 149 93 Sources of Funds 2,054 1,948 107 Fixed Assets 152 134 18 Intangible Assets & Investment Pro
Slide 31: Cash Flow
Cash Flow Q2 FY19 Q2 FY20 Rs Bn H1 FY19 H1 FY20 39.8 45.6 Operating Profit 67.7 83.0 (0.7) (18.8) Changes in Working Capital (36.0) (85.6) (13.2) (12.9) Direct Taxes paid (22.3) (21.7) 25.9 13.9 Net Cash from Operations (A) 9.3 (24.2) (7.1) (5.5) Net Investment in Fixed Assets (incl. Intangible) (13
Slide 32: Share in Profit/(Loss) of JVs/Associates
Share in Profit/(Loss) of JVs/Associates Q2 FY19 Q2 FY20 Rs Bn H1 FY19 H1 FY20 0.39 0.61 MHPS JVs 0.81 0.93 (0.88) (0.01) IDPL & Subs. 1.67 (0.73) (0.35) (0.36) Special Steels and Heavy Forgings (0.71) (0.72) (0.13) 0.15 Others (0.14) 0.23 (0.96) 0.40 Total 1.63 (0.29) Engineering Manufacturing Cons
Slide 33: Concessions Business Portfolio – 14 SPVs
Concessions Business Portfolio – 14 SPVs Roads and Bridges Transmission Lines Metros Power (Excl. Projects under DPR) Portfolio: Portfolio: Portfolio: Portfolio: 10 projects (1048 Km) 1 project (482 Km) 1 project (71.16 Km) 2 projects (1499 MW) 10 Operational - Operational – Under-implementation 1 O