Shares of Larsen & Toubro (L&T) jumps over 4% to intra-day high of Rs 3,550 on NSE as the company reported a 5% year-on-year (YoY) increase in its net profit for Q2FY25, with profit reaching R 3,395 crore for the quarter ended September 2024.
Strong Revenue Growth Driven by Projects & Manufacturing
L&T achieved a consolidated revenue of Rs 61,555 crore for the quarter, marking a robust 21% YoY growth. The rise in revenue is attributed to accelerated progress across various segments within the Projects & Manufacturing (P&M) portfolio.
For the half-year ending September 30, 2024, L&T’s consolidated revenue totaled Rs 1,16,674 crore, reflecting an 18% YoY increase. Of this, international revenues reached Rs 58,305 crore, representing 50% of the total half-year revenue.
Impact of Non-Recurring Gain in Prior Year
In its Q2 and H1FY24 consolidated performance, L&T had benefited from a non-recurring gain of Rs 512 crore due to the Transit Oriented Development (TOD) monetization within its Hyderabad Metro concession.
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Adjusting for this one-time gain, the company reported underlying growth in consolidated net profit for Q2FY25 and H1FY25 at 25% and 19%, respectively, compared to the previous year.
Order Book and International Revenue Composition
During Q2FY25, L&T received orders worth Rs 80,045 crore at the group level, showing a sequential increase of 13% but a YoY decline of 10%, largely due to the high base from the previous year.
International revenues for the quarter were Rs 32,057 crore, constituting 52% of total revenues, reflecting the strength of L&T’s international P&M order book, according to the company’s filing.
Brokerages on L&T
Bernstein on L&T
Bernstein maintains an “Outperform” rating on Larsen & Toubro (L&T), setting a target price at ₹3,891 per share, citing strong execution and a robust working capital position as key drivers.
According to Bernstein, despite a decline in order inflows due to a high base from the previous year, L&T’s management has retained its guidance. The report notes that the company’s strong execution and working capital efficiency have effectively compensated for challenges in margin and order inflow.
Nomura on L&T
Nomura maintains a “Buy” call on Larsen & Toubro (L&T), with a target price set at Rs 4,100 per share, emphasizing a favorable risk-reward profile following strong results.
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