The profit stood at Rs 3,926 crore, supported by a 10% YoY jump in revenues, which reached Rs 67,984 crore during the second quarter.
L&T also reported that its earnings before interest, taxes, depreciation, and amortization (EBITDA) improved by 7% YoY, reaching Rs 6,806 crore for the quarter. However, the EBITDA margin witnessed a slight decline, coming in at 10%.
The company reported achieving a well-rounded financial performance across all key parameters in the second quarter.
Commenting on the results, S N Subrahmanyan, Chief Managing Director of L&T, said that the company’s ability to secure large orders across multiple segments and geographies repeatedly reflects its leadership position in the engineering, procurement, and construction (EPC) domain.
L&T’s order inflow during the quarter surged significantly, with the company securing new orders worth Rs 1.15 lakh crore. This marks a 45% YoY increase, which the company attributed to strong order momentum across a broad spectrum of businesses.During the quarter, the company reported order wins in a variety of sectors. These included public spaces, data centres, commercial buildings, metro infrastructure, hydel and tunnel projects, transmission and distribution, renewable energy, and both offshore and onshore assignments in the hydrocarbon segment.
After the company’s Q2 results, here’s what brokerage firms are saying:
Morgan Stanley: Overweight| Target price: Rs 4,090
Morgan Stanley has maintained its “Overweight” rating on Larsen & Toubro (L&T) and set a target price of Rs 4,090 for the stock. The brokerage noted that L&T’s core revenue grew by 10% year-on-year, which was 4% below its estimates. Meanwhile, the company’s EBITDA rose 12% YoY during the quarter.
The report highlighted that order inflows surged by 54% YoY, with energy sector orders showing a sharp 392% growth compared to the same period last year. L&T’s order book expanded by 31% on a yearly basis. The return on equity (ROE) improved to 17.2%, up from 16.1% previously.
Morgan Stanley further emphasized that the company maintains a strong growth outlook, underpinned by a continued focus on infrastructure and high-tech segments.
Goldman Sachs: Neutral| Target price: Rs 3,740
Goldman Sachs has maintained a “Neutral” rating on Larsen & Toubro (L&T), revising its target price upwards to Rs 3,740 from the earlier Rs 3,540. The brokerage noted a 45% year-on-year increase in order inflows for the company. It also observed an improvement in EBITDA margin, which stood at 8%, up 40 basis points YoY.
Revenue rose by 10% compared to the previous year. While Goldman Sachs pointed to slower execution, it acknowledged that L&T maintains solid order visibility. The company’s return on equity (ROE) was reported at 17.2%, compared to 16.1% a year earlier, supported by strong margins in the infrastructure segment.
However, the brokerage expressed concerns regarding slow project conversion, weak margins in the energy segment, and rich stock valuations.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)