L&T announces Q2 result today: Healthy order inflow expected to boost profit

Larsen & Toubro, which will report its September quarter results on October 31, is likely to put up a good show backed by healthy order inflow and better execution potential ahead.

Brokerages estimate the profit after tax to be in the range of Rs 1,100-2,077 crore for the company in the quarter under review.

Here’s a gist of what multiple analysts are expecting from the company’s September quarter results announcement.

Brokerage: ICICI Securities | PAT: Rs 1,100.4 crore

The brokerage house highlighted the order inflows have been healthy at Rs 30,758 crore during the quarter under review. This order inflow has been front loaded, it said, considering more than 50 percent of the expected order inflow has already been received in the first half of this fiscal. This suggests a better execution rate in the coming year, analysts at the firm wrote in their report.

It sees revenues to grow 8.3 percent YoY to Rs 17,180.9 crore on a standalone basis owing to better execution rate. Meanwhile, operating margin is expected to improve to 8.7 percent.

“However, L&T can report one-off gains arising from profitability on sale of stake in its IT subsidiary companies.”

Brokerage: Motilal Oswal | PAT: Rs 1,460 crore

The brokerage house expects revenue to grow 10 percent YoY to Rs 26,300 crore.

The operating profit margin could expand 200 basis points year-on-year to 10.6 percent supported by Katupalli port transaction getting recorded in the quarter, excluding which margin would stand at 9.2 percent.

Further, it also highlighted that the company announced order intake of Rs 36,000 crore in Q1FY19 compared to Rs 19,200 crore in Q1FY18.

“Large orders worth Rs 264 billion were finalised during the quarter. Domestic order wins were supported by order finalisation in the water infrastructure segment. Overseas order finalisation was supported by the infrastructure and power segments.”

Brokerage: Kotak Institutional Equities | PAT: Rs 1,542.5 crore

For the core engineering and construction segment, the research firm expects steady 11 percent YoY growth off a low base for infrastructure segment (uptick in execution pre-GST).

The brokerage expects similar 12 percent overall revenue growth and core E&C EBITDA margin of 9 percent. This is a dip of 20 bps YoY as Q2FY18 had been impacted by one-offs (higher margin in the hydrocarbon segment).

Going forward, it expects a modest 6 percent growth in EBITDA for the consolidated entity due to low profitability of the Hyderabad metro.

Brokerage: Prabhudas Lilladher | PAT: Rs 2,077.4 crore

Prabhudas Lilladher is penciling in healthy execution, led by engineering and construction segments along with services section. It expects margins to improve by 30 basis points due to operating efficiencies and better margin in services business.