Larsen & Toubro Limited · NSE:LT
Larsen & Toubro — Q2 FY2021 Earnings Presentation
47 slides from Larsen & Toubro's earnings presentation, Nov 4, 2020
Slide 1: Cover letter to stock exchanges: Investor Presentation
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/PAM/2020 November 4, 2020 The Secretary National Stock Exchange of India Limited BSE Limited Exchange Plaza, 5t
Slide 2: Investor Presentation Q2/H1 FY21
LARSEN & TOUBRO Investor Presentation Q2/H1 FY21 Nov 4, 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 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 ₹ 1,381Bn Managed Company ICRA: AAA (Stable) FY 20 Group 28th Oct, 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 Sept '08 715 Sensitivity : This Document is Classified as "LNT Internal Use". 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 Bharat ETF, Others, Govt. 0.6% 6.1% Financial Mutual Funds & Pvt. Institutions Insurance & Insurance Cos., Companies, 15% 22% 30th Sept, Major Institutional Shareholders % Shares L&T 2020 Life Insurance Corporation of India 14.9% Employee Trust, FII's & GDR, HDFC Mutual Fu
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 Whole-Time 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. • Audit Committee • Nomination & Remuneration Committee • Stakeholder’s Relationship Committee Board • Corporate Social Responsibility Committee of Directors •
Slide 10: ESG, Sustainability & Integrated Report
ESG, 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 D
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: Governance- Policies, Procedures and Guiding Principles
Governance- Policies, Procedures and Guiding Principles Important Structures & Processes Important Policies Voluntary Adoption Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Document is Classified as "LNT Internal Use".
Slide 13: Business Overview
Business Overview Engineering Manufacturing Engineering Manufacturing Construction Projects Projects Technology Technology Financial FinancialServices Services 12 Sensitivity : This Document is Classified as "LNT Internal Use".
Slide 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: Group Performance
Group Performance Engineering Manufacturing Construction Projects Technology Technology Financial Services Financial Services Sensitivity : This Document is Classified as "LNT Internal Use". 20
Slide 22: Q2 FY21: Sequentially strong quarter
Q2 FY21: Sequentially strong quarter Order wins pick up QoQ Order Book stable Revenue momentum picking up amidst productivity challenges Strong sequential improvement in operational PAT Robust operational free cashflow Some green shoots of recovery seen Engineering Manufacturing Construction Project
Slide 23: Key Financial Indicators
Key Financial Indicators (Amount in ₹ bn) Q2 FY20 Q2 FY21 % Var Particulars H1 FY20 H1 FY21 % Var 483 280 -42% Order Inflow 870 516 -41% Order Book 3032 2989 -1% 353 310 -12% Revenue 650 523 -20% 40 33 -17% EBITDA 71 50 -30% 25 55 >100% PAT* 40 58 46% Net Working Capital 23.2% 26.7% RONW (TTM) (%)*
Slide 24: Q2/H1 FY21 Order Inflow/Order Book
Q2/H1 FY21 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book -42% -41% -1% H1 FY21 Q2 FY20 Q2 FY21 671 716 178 102 280 326 190 516 3032 2989 H1 FY20 613 257 870 2361 2273 316 167 483 H1 FY20 H1 FY21 Domestic International • Ordering activity in Infra relatively strong despite pandemic
Slide 25: Group Performance – Sales & Costs
Group Performance – Sales & Costs Q2 Q2 H1 H1 • E&C revenues register strong QoQ % Var Rs Billion % Var FY20 FY21 FY20 FY21 growth. 353.3 310.3 -12% Revenue 649.6 522.9 -20% • MCO expense variation largely reflective of job progress, revenue 34% 39% - International Rev. 33% 41% - mix and cost contro
Slide 26: Group Performance – Profit Parameters
Group Performance – Profit Parameters Q2 Q2 H1 H1 % Var Rs Billion % Var FY20 FY21 FY20 FY21 40.2 33.3 -17% EBITDA 70.9 49.6 -30% • Finance cost commensurate with increased borrowings and full (6.9) (10.4) 52% Fin. Cost (12.7) (21.0) 65% commissioning of Hyd. Metro (6.3) (7.1) 13% Depreciation (10.9
Slide 27: 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 28: 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 29: H1 FY21 Order Inflow Composition
H1 FY21 Order Inflow Composition Defence Engg. Hydrocarbon 3% Services Middle East 40% USA & 3% 12% Europe HE 21% 1% Power ROW 0.2% 4% Others 3% Infrastructure Domestic 50% 63% Order Inflow Rs 516 Bn Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Doc
Slide 30: H1 FY21 Order Book Composition
H1 FY21 Order Book Composition HE Power 1% 5% Middle East Hydrocarbon Infrastructure 14% USA & 13% 74% Europe 1% Defence ROW Engg. 9% 3% Others 4% Domestic 76% Order Book Rs 2989 Bn Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Document is Classifie
Slide 31: H1 FY21 Revenue Composition
H1 FY21 Revenue Composition Defence Engg. Services Middle East USA & 2% 39% 12% Europe Hydrocarbon 21% 14% Others 4% HE 2% ROW 8% Power 2% Infrastructure Domestic 37% 59% Revenue Rs 523 Bn Engineering Manufacturing Construction Projects Technology Financial Services Sensitivity : This Document is Cl
Slide 32: Infrastructure Segment
Infrastructure Segment (Amount in ₹ bn) Net Revenue -20% Net Revenue -35% 74.2 162.3 53.0 42.0 129.7 34.5 298.2 193.6 120.3 95.2 224.0 140.6 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 7.2% EBITDA Margin 6.4% 6.8% EBITDA Margin 6.3% Domestic International • Sequential improvement in ordering momentum in Q2; enc
Slide 33: Power Segment
Power Segment (Amount in ₹ bn) Net Revenue 42% Net Revenue 2% 0.8 6.9 2.6 0.5 4.8 1.0 10.4 10.6 6.4 7.8 3.8 9.8 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 4.1% EBITDA Margin 3.1% 3.7% EBITDA Margin 2.4% Domestic International • Award deferments seen in H1, healthy opening order book on back of large wins in FY
Slide 34: Heavy Engineering Segment
Heavy Engineering Segment (Amount in ₹ bn) Net Revenue -3% Net Revenue -34% 6.0 6.0 6.2 6.6 2.8 3.6 14.9 9.8 3.8 3.4 8.3 2.4 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 24.9% EBITDA Margin 5.1% 21.7% EBITDA Margin 9.9% Domestic International • Muted order wins in pandemic environment • Better capacity utilisati
Slide 35: Defence Engineering Segment
Defence Engineering Segment (Amount in ₹ bn) Net Revenue -20% Net Revenue -35% 1.3 9.6 2.9 0.9 7.6 2.0 18.9 12.4 8.7 9.5 5.6 17.6 Q2 FY20 Q2 FY21 H1 FY20 H1 FY21 18.1% EBITDA Margin 24.4% 17.4% EBITDA Margin 20.0% Domestic International • Significant order win in current year replenishes opening ord
Slide 36: Hydrocarbon Segment
Hydrocarbon Segment (Amount in ₹ bn) Net Revenue -6% Net Revenue -12% 43.0 40.4 36.6 37.0 18.1 21.5 80.7 71.1 24.9 34.1 18.9 44.1 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 12.5% EBITDA Margin 8.5% 10.2% EBITDA Margin 7.1% Domestic International • Muted order inflow due to lower capex/depressed oil prices • Im
Slide 37: Developmental Projects Segment
Developmental Projects Segment (Amount in ₹ bn) Net Revenue -22% Net Revenue -36% 14.5 5.5 3.6 11.4 0.4 26.3 10.9 11.0 20.8 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 10.2% EBITDA Margin 5.3% 10.1% EBITDA Margin 5.8% Nabha Hyd. Metro • Segment includes Power Development Business (Nabha), Hyderabad Metro • Road
Slide 38: IT & Technology Services Segment
IT & Technology Services Segment (Amount in ₹ bn) Net Revenue 5% Net Revenue 26% 61.7 37.8 58.8 19.1 19.1 12.9 121.9 13.8 25.9 29.7 25.5 58.6 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 19.5% EBITDA Margin 23.2% 21.0% EBITDA Margin 21.9% LTI LTTS Mindtree • LTI revenue growth led by BFS, Manufacturing, High Tec
Slide 39: Others Segment
Others Segment (Amount in ₹ bn) Net Revenue -33% Net Revenue -40% 2.4 3.3 19.6 1.1 13.2 2.0 34.1 20.3 18.5 11.2 31.7 17.0 H1 FY20 H1 FY21 Q2 FY20 Q2 FY21 18.3% EBITDA Margin 18.0% 19.0% EBITDA Margin 14.1% Domestic International • Segment comprises Construction & Mining Equipment, Rubber Processing
Slide 40: L&T Finance Holdings Group
L&T Finance Holdings Group Q2 FY20 Q2 FY21 % Var Rs Bn H1 FY20 H1 FY21 % Var 34.4 33.4 -3% Income from Operations 69.1 66.3 -4% 1.1 1.7 53% PAT (Net of NCI) 4.6 2.6 -43% Mutual Fund Average AUM 692.1 630.6 -9% Net Loan Book 1,002.6 988.2 -1% Gross Stage 3 Assets 6.0% 5.2% Net Stage 3 Assets 2.8% 1.7
Slide 41: The Environment & Outlook
The Environment & Outlook 40 Sensitivity : This Document is Classified as "LNT InternalEngineering Use". Manufacturing Construction Projects Technology Financial Services
Slide 42: The Environment & the Outlook
The Environment & the Outlook ▪ Healthy Balance Sheet, robust Order Book, ▪ Significantly large investment plan (NIP) Economic Portfolio diversity (cyclicality hedge), ▪ Funding plan in place (though Pvt. Sector may Govt. focus dependence on Public capex, Execution track Moat record, strong liquidit
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 H1 FY21 H1 FY20 Segment (Rs Cr) Net EBITDA Net EBITDA EBITDA EBITDA Revenue % Revenue % Ex-Services business: Infrastructure Segment 19363 1225 6.3% 29824 2039 6.8% Power Segment 1061 25 2.4% 1045 38 3.7% Hydrocarbon Segment 7105 507 7.1% 8065 822 10.2% Heavy Engineering Segment 979 9
Slide 45: Balance Sheet
Balance Sheet Incr / Rs Billion Sept-20 Mar-20 (Decr) Equity & Reserves 723 667 56 Non Controlling Interest 102 95 7 Borrowings - Financial Services 909 939 (30) Development Projects 199 202 (3) Others 358 269 89 Sources of Funds 2,291 2,173 118 Fixed Assets 141 156 (15) Intangible Assets & Investme
Slide 46: Cash Flow
Cash Flow Q2 FY20 Q2 FY21 Rs Bn H1 FY20 H1 FY21 45.6 35.6 Operating Profit 83.0 53.3 (18.6) (1.2) Changes in Working Capital [(Inc)/Dec] (85.6) (5.0) (12.9) (6.8) Direct Taxes paid (21.7) (11.8) 14.1 27.6 Net Cash from Operations (A) (24.2) 36.5 (5.5) (3.6) Net Investment in Fixed Assets (incl. Inta
Slide 47: Share in Profit/(Loss) of JVs/Associates
Share in Profit/(Loss) of JVs/Associates Q2 FY20 Q2 FY21 Rs Bn H1 FY20 H1 FY21 0.61 0.32 Boiler/Turbine JVs 0.93 0.43 (0.01) (0.52) IDPL & Subs. (1.66) (1.15) (0.36) (0.32) Special Steels and Heavy Forgings (0.72) (0.73) 0.15 (0.01) Others 0.22 (0.09) 0.40 (0.53) Total (1.23) (1.54) Engineering Manu