Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q1 FY21 Earnings Presentation
47 slides from Larsen & Toubro's earnings presentation, Jul 24, 2020
Slide 1: Exchange filing cover letter
Larsen & Larsen & Toubro Toubro Limited Limited Q LARSEN & TOUBRO Secretarial Department Secretarial L&T House, LEtT Narottam Mumbai -- 400 Mumbai Tel: +91 Tel: Department House, Ballard Ballard Estate Narottam Morarjee 400 001, +91 22 22 6752 Estate Morarjee Marg Marg 001, INDIA INDIA 6752 5656 565
Slide 2: Investor Presentation Q1 FY21
LARSEN & TOUBRO Investor Presentation Q1 FY21 July 24, 2020 1 Sensitivity : This Document is Classified as "LNT Internal Use". 1
Slide 3: 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 4: L&T Overview
L&T Overview Engineering Manufacturing Construction Projects Technology Financial Financial Services Services 3 Sensitivity : This Document is Classified as "LNT Internal Use".
Slide 5: L&T – At a Glance
L&T – At a Glance India’s largest E&C company with interests in Projects, Infrastructure Development, Manufacturing, IT & Financial Services. Revenues Credit Ratings Market Cap Professionally ₹1,455Bn CRISIL: AAA / Stable ₹ 1,293Bn Managed Company ICRA: AAA (Stable) FY 20 Group 22nd Jul, 2020 (appro
Slide 6: L&T – At a Glance: Market Cap
Mar '04 71 Sept '04 106 Mar '05 129 Sept '05 200 Mar '06 334 Sept '06 356 Mar '07 459 Sept '07 807 Mar '08 884 Sensitivity : This Document is Classified as "LNT Internal Use". Sept '08 715 Mar '09 394 Sept '09 989 L&T – At a Glance Engineering Mar '10 979 Sept '10 1,237 Mar '11 1,007 Sept '11 830 Ma
Slide 7: L&T – Shareholding Pattern
L&T – Shareholding Pattern Others, Bharat ETF, 7% Govt. 0.6% Financial Mutual Institutions Funds & Pvt. & Insurance Insurance Companies, Cos., 22% 15% 30th Jun, Major Institutional Shareholders % Shares L&T 2020 Life Insurance Corporation of India 14.9% Employees Trust, FII's & GDR, HDFC Mutual Fund
Slide 8: Experienced Management Team
Experienced Management Team 1 2 3 4 5 6 7 8 9 Subramanian A M Naik S. N. R Shankar D. K. Sen M. V. Satish J.D. Patil S.V. Desai T.Madhava Das Sarma Group Subrahmanyan Raman Whole-time Whole-time Director Whole-time Whole-Time Whole-Time Designate Chairman Chief Executive Whole-time Director & Sr. &
Slide 9: Corporate Governance
Corporate Governance L&T’s essential character revolves around values based on transparency, integrity, professionalism and accountability. Board of Directors Four-tier Governance Executive Committee Structure (ECom) Independent Company (IC) Board Strategic Business Group (SBG) / Business Unit (BU)
Slide 10: Sustainability & Integrated Report
Sustainability & Integrated Report <IR> 2018-19 available on www.Larsentoubro.com In alignment with Based on International Global Reporting Integrated Reporting Initiative (GRI) Council (IIRC) framework Standards ‘In Accordance – Comprehensive Reports progress on option’ – highest Sustainable Develo
Slide 11: Sustainability – Environment & Social
Sustainability – Environment & Social Green Product Portfolio – INR 317. 65 Billion CSR Highlights – 2.3 million beneficiaries • Theme: Building India’s Social Infrastructure • 24 campuses have achieved the ‘zero water discharge’ status • Integrated Community Development Program • Secured 500+ MV Gr
Slide 12: Business Overview
Business Overview Engineering Manufacturing Engineering Manufacturing Construction Projects Projects Technology Technology Financial FinancialServices Services 11 Sensitivity : This Document is Classified as "LNT Internal Use".
Slide 13: Builders to the Nation
Builders to the Nation Statue of Unity, Gujarat Turbine Rotor, Gujarat 88m Rail Bridge Jammu Udhampur Wankhede Stadium, Mumbai Baha’i Temple, Delhi Mumbai International Airport Medigadda Barrage, Telangana Vivekanand Bridge, Kolkata Kakrapar Nuclear Power Plant, Guj Vizag Steel Plant Sri Sathya Sai
Slide 14: International Footprint – Marquee Jobs
International Footprint – Marquee Jobs Stadium at Barbados Salalah Airport, Oman Twin Towers, Dubai Marina NMC Speciality hospital, Abu Dhabi Bhukara Hotel, Uzbeckistan World’s Longest Conveyer, Bangladesh Bulk Cement Terminal, Colombo Fabrication Facility, Oman Punatsangchhu HEP, Bhutan Sheikh Khal
Slide 15: Value creating Integrated Business Model
Value creating Integrated Business Model Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Document is Classified as "LNT Internal Use".
Slide 16: 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 Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This
Slide 17: Quality Customer Mix
Quality Customer Mix Indian Coastguard Engineering Manufacturing Construction Projects Technology Financial Services Engineering Engineering Manufacturing Manufacturing Construction Construction Projects Projects Technology Technology Financial Financial Services Services Sensitivity : This Document
Slide 18: 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 Engineering Manufacturing Engineering Manufacturing Construction Construction Projects Projects Technology Technology Financial S
Slide 19: L&T’s Business Structure
L&T’s Business Structure LARSEN & TOUBRO LTD. 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)
Slide 20: Group Performance
Group Performance Engineering Manufacturing Construction Projects Technology Technology Financial Services Financial Services Sensitivity : This Document is Classified as "LNT Internal Use". 19
Slide 21: Q1 FY21: An Unprecedented Quarter
Q1 FY21: An Unprecedented Quarter Order wins amidst the pandemic Order Book stable Revenues reflect lockdown conditions Consequences of negative operating leverage Strong Cashflow Management Ample systemic liquidity Engineering Manufacturing Construction Projects Technology Financial Services Sensit
Slide 22: Key Financial Indicators
Key Financial Indicators (Amount in ₹ bn) Q1 FY20 Particulars Q1 FY21 % Var 387 Order Inflow 236 -39% 2940 Order Book 3051 4% 296 Revenue 213 -28% 31 EBITDA 16 -47% 15 PAT 3 -79% 23.9% Net Working Capital 26.8% 15.4% RONW (TTM) (%) 12.7% - Engineering Manufacturing Construction Projects Technology F
Slide 23: Q1 FY21 Order Inflow/Order Book
Q1 FY21 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book 39% 4% Q1 FY20 Q1 FY21 624 745 147 89 236 2940 3051 297 90 387 2316 2306 Q1 FY20 Q1 FY21 Domestic International • Ordering activity has continued despite pandemic concerns, though with time delays • Priority for Infra: Sectors
Slide 24: Group Performance – Sales & Costs
Group Performance – Sales & Costs • Pandemic shadows Q1 revenues across verticals. IT&TS businesses smoothly transition to WFH model Rs Billion Q1 FY20 Q1 FY21 % Var • MCO expense variation largely due to higher proportion of IT&TS Revenue 296.4 212.6 -28% business and cost control initiatives Inter
Slide 25: Group Performance – Profit Parameters
Group Performance – Profit Parameters • Finance cost commensurate with Rs Billion Q1 FY20 Q1 FY21 % Var increased borrowings and full commissioning of Hyd. Metro EBITDA 30.7 16.2 -47% • Higher depreciation charge mainly Fin. Cost (5.9) (10.6) 80% on account of Mindtree consolidation Depreciation (4.
Slide 26: Segment Performance Analysis
Segment Performance Analysis Engineering Manufacturing Engineering Manufacturing Construction Construction Projects Projects Technology Technology Financial Financial Services Services Sensitivity : This Document is Classified as "LNT Internal Use".
Slide 27: 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 28: Q1 FY21 Order Inflow Composition
Q1 FY21 Order Inflow Composition ROW Others 3% 2% USA & Europe Infrastructure 23% 48% Services 42% Middle East Defence 12% Domestic Engineering 1% 62% Hydrocarbon Power 5% HE 2% 0.2% Order Inflow Rs 236 Bn Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : Th
Slide 29: Q1 FY21 Order Book Composition
Q1 FY21 Order Book Composition ROW Others USA & Hydrocarbon 9% 5% Europe 14% 1% Defence Engineering 3% Middle East HE 14% 1% Power 5% Infrastructure Domestic 72% 76% Order Book Rs 3051 Bn Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Document is Cla
Slide 30: Q1 FY21 Revenue Composition
Q1 FY21 Revenue Composition Others ROW 3% 7% Infrastructure 30% USA & Europe 26% Services 47% Power 2% HE 2% Defence Domestic Middle Engineering 55% East 2% 12% Hydrocarbon 14% Revenue Rs 213 Bn Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Document
Slide 31: Infrastructure Segment
Infrastructure Segment (Amount in ₹ bn) Net Revenue 53% 32.3 18.5 135.9 63.9 103.6 45.4 Q1 FY20 Q1 FY21 6.4% EBITDA Margin 6.3% Domestic International • Early signs of ordering activity pick-up (both domestic and international) • Execution hindered by lockdown across all verticals; graded resumption
Slide 32: Power Segment
Power Segment (Amount in ₹ bn) Net Revenue 33% 0.3 1.6 5.6 3.7 4.0 3.4 Q1 FY20 Q1 FY21 3.3% EBITDA Margin 1.0% Domestic International • No prospects targeted for award in Q1 • Revenue decline reflects gradual resumption of operations during the quarter • High value orders won last year yet to cross
Slide 33: Heavy Engineering Segment
Heavy Engineering Segment (Amount in ₹ bn) Net Revenue 57% 3.8 2.5 8.7 3.8 1.3 4.9 Q1 FY20 Q1 FY21 19.5% EBITDA Margin 17.5% Domestic International • Order wins (including international) despite global pandemic • Phased ramp up constricts revenues for the quarter. • Margin variation on low capacity
Slide 34: Defence Engineering Segment
Defence Engineering Segment (Amount in ₹ bn) Net Revenue 49% 0.4 0.9 9.4 4.7 3.8 9.0 Q1 FY20 Q1 FY21 16.6% EBITDA Margin 12.9% Domestic International • Ordering from MoD getting deferred due to pandemic • Supply chain constraints hamper execution during Q1 • Margins affected by job mix and under-rec
Slide 35: Hydrocarbon Segment
Hydrocarbon Segment (Amount in ₹ bn) Net Revenue 19% 18.5 15.5 37.6 30.6 19.1 15.1 Q1 FY20 Q1 FY21 7.6% EBITDA Margin 5.3% Domestic International • Slowdown in order inflows due to depressed oil prices • Revenue growth impacted by low utilisation at yards and constraints on execution at job sites •
Slide 36: Developmental Projects Segment
Developmental Projects Segment (Amount in ₹ bn) Net Revenue 53% 1.9 0.3 11.8 5.5 5.2 9.9 Q1 FY20 Q1 FY21 10.0% EBITDA Margin 7.0% Nabha Hyd. Metro • Segment includes Power Development business (Nabha), Hyderabad Metro • Roads & TL concessions (housed in IDPL) are consolidated at PAT level under Equi
Slide 37: IT & Technology Services Segment
IT & Technology Services Segment (Amount in ₹ bn) Net Revenue 58% 18.7 13.3 38.2 60.3 29.0 24.9 12.6 Q1 FY20 Q1 FY21 23.2% EBITDA Margin 20.7% IT TS Mindtree • LTI revenue growth led by Manufacturing, CPG, Retail and Pharma , Energy and utilities and BFS • LTTS revenue largely contributed by strong
Slide 38: Others Segment
Others Segment (Amount in ₹ bn) Net Revenue 51% 1.3 1.3 14.5 7.1 13.2 5.8 Q1 FY20 Q1 FY21 19.9% EBITDA Margin 6.7% Domestic International • Segment comprises Construction & Mining Equipment, Rubber processing Machinery, Industrial Valves, Realty businesses and Smart World & Communications • Q1 reven
Slide 39: L&T Finance Holdings Group
L&T Finance Holdings Group Rs Bn Q1 FY20 Q1 FY21 % Var Income from Operations 34.6 32.8 -5% PAT (Net of NCI) 3.5 0.9 -73% Mutual Fund Average AUM 735.0 583.6 -21% Net Loan Book 999.0 988.8 -1% Gross Stage 3 Assets 5.7% 5.2% Net Stage 3 Assets 2.5% 1.7% Networth 139.9 148.8 6% • Strategy revolved aro
Slide 40: Electrical & Automation Segment
Electrical & Automation Segment (Amount in ₹ bn) Net Revenue 48% 3.5 2.5 13.6 7.1 10.1 4.6 Q1 FY20 Q1 FY21 16.9% EBITDA Margin 2.5% Domestic International • Sharp contraction in revenues during a lockdown quarter • Fixed overheads of manufacturing units charged to profits amidst low capacity utilisa
Slide 41: The Environment & Outlook
04 The Environment & Outlook 40 Engineering Sensitivity : This Document is Classified as "LNT Internal Use". Manufacturing Construction Projects Technology Financial Services
Slide 42: The Environment & the Outlook
The Environment & the Outlook ▪ Significantly large investment ▪ Healthy Balance Sheet, robust Order plan (NIP) Govt. focus Economic Book, Portfolio diversity, dependence ▪ Funding plan in place (though on Infra Moat on Public capex, Execution track record, strong liquidity Pvt. Sector may fall shor
Slide 43: Thank You
Thank You Sensitivity : This Document is Classified as "LNT Internal Use". Turn overleaf for Annexures
Slide 44: Segment Margin
Segment Margin Q1 FY21 Q1 FY20 Segment (Rs Cr) Net EBITDA Net EBITDA EBITDA EBITDA Revenue % Revenue % Ex-Services business: Infrastructure Segment 6393 400 6.3% 13594 873 6.4% Power Segment 374 4 1.0% 561 18 3.3% Hydrocarbon Segment 3062 163 5.3% 3763 285 7.6% Heavy Engineering Segment 378 66 17.5%
Slide 45: Balance Sheet
Balance Sheet Incr / Rs Billion Jun-20 Mar-20 (Decr) Equity & Reserves 675 667 8 Non Controlling Interest 99 95 3 Borrowings - Financial Services 939 939 1 Development Projects 218 202 16 Others 395 269 126 Sources of Funds 2,326 2,173 153 Fixed Assets 154 156 (1) Intangible Assets & Investment Prop
Slide 46: Cash Flow
Cash Flow Rs Bn Q1 FY20 Q1 FY21 Operating Profit 37.4 17.8 Changes in Working Capital (67.0) (4.0) Direct Taxes paid (8.7) (5.0) Net Cash from Operations (A) (38.3) 8.8 Net Investment in Fixed Assets (incl. Intangible) (4.7) (3.6) Net (Purchase)/ Sale of Long Term investments (61.3) 3.4 Net (Purchas
Slide 47: Share in Profit/(Loss) of JVs/Associates
Share in Profit/(Loss) of JVs/Associates Rs Bn Q1 FY20 Q1 FY21 MHPS JVs 0.31 0.11 IDPL & Subs. (1.65) (0.62) Special Steels and Heavy Forgings (0.37) (0.41) Others 0.08 (0.09) Total (1.63) (1.01) Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Documen