Larsen & Toubro hosted a conference call on Jan 30, 2024. In the conference call the company was represented by P Ramakrishnan, Head Investor Relations.  

Key takeaways of the call

Expect order inflow for FY24 to register a growth of 20% plus (against earlier guided outperformance of upper band of 10-12% at the end of H1FY24) and revenue growth for FY24 to be in high teens (a growth of 15% given at the end of H1FY24).  But, has revised down the margin from a band of 8.5-9% guided earlier to a band of 8.25 to 8.5% for FY24. 

No challenge in case of new projects but margin recognition of new project that was expected in Q3& Q4FY24 got postponed. Multiple new jobs not cross valuation threshold. New jobs execution are ramping up. So some sort of postponement of margin recognition to FY25.

Group order book as on December ''23 stood at   Rs.4.7 trillion, which is up by 22% YoY.  And 92% of the total order book is coming from Infrastructure and Energy.

Of the total order book about 61% is domestic (or Rs 2.86 trillion). Moreover of the domestic order book   Central government 12%, state government 31%, PSU or state-owned enterprises 35% and Private sector 22%. Approximately around 18% of total order book of Rs.4.7 trillion is funded by bilateral and multilateral funding agencies.

During the quarter ended December ''23, Q3 FY''24, the company have deleted orders of close to Rs.27 billion from the order book. As on December ''23, slow moving orders is well less than 1% of the total order book.

Group order inflows for Q3 FY''24 was higher at Rs 760 billion (up by 25%YoY) and within that the  Projects and Manufacturing businesses secured order inflows of Rs 602 billion (up 32%YoY).  Projects and Manufacturing portfolio order inflow in Q3FY24 are mainly from Infrastructure and Hydrocarbon segments. During the current quarter, the share of international orders in the Projects and Manufacturing portfolio was at 67% vis-à-vis 12% in Q3 of last year. During the quarter, orders were received across various spectrum of businesses like Offshore vertical of Hydrocarbon, Renewable EPC, Water, Utilities, Airports, Health and Residential spaces, Power Transmission as well as Ferrous Metals.

Total order prospect pipeline for the near term   stood at of Rs.6.27 trillion (up 29%YoY against 4.87 trillion at the same time last year).  Of the total order prospect of Rs 6.27 trillion, infrastructure is RS 4.1 trillion (vs 3.88 trillion as end of Dec 2022), Hydrocarbon is Rs 1.7 trillion (vs 0.61 trillion as end of Dec 2022), Power business is Rs 0.3 trillion (vs 0.20 trillion as end of Dec 2022), Heavy Engineering/Defence is Rs 0.16 trillion (almost same level in Dec 2022).

GCC Capex in both Infra and Hydrocarbon is on an upswing largely led by the Saudi Vision 2030

Chennai data centre projects with 12 MW capacity is  expected to be completed in Q4 FY2024. The Data Center at Panvel, a pilot project by L&T, has already gone live with the capacity of 1.4 MW in the Mumbai region.  L&T plans to have an aggregate capacity of around 60 MW in the Data Center domain over the next couple of years.

Manufactured the first Electrolyzer of 1 MW in the Hazira factory on December 13th, 2023.

On the Green Energy side, L&T Electrolysers Limited has emerged as a successful bidder with an allotted capacity of 63 MW under the tranche-I of the PLI scheme for electrolyser manufacturing, launched by the Ministry of New and Renewable Energy.

Incorporated a wholly-owned subsidiary, L&T Semiconductor Technologies Limited on November 29, 2023. Over time, this company will be engaged in the business of fabless semiconductor chip design and product ownership.