L&T Q2 results: Profit may rise up to 30% on firm construction activity; strong order wins likely

Larsen & Toubro Ltd (L&T) is likely to report a 19-30 per cent surge in net profit for the September quarter on a 15 per cent-plus growth in sales. Margin is seen improving for the construction and engineering major, marginally on a sequential basis; it may stay low on an yearly comparison. Order wins are seen solid, thanks to two big order wins from Aramco and one mega order from the Mumbai Metropolitan Region Development Authority (MMRDA) announced during the quarter.

For the capital goods sector, Q2 was marked by strong opening order books, continued execution momentum and favourable product mi. Analysts said there was better demand from domestic and key export markets such as Middle East, Americas, SAARC and Africa.

PhillipCapital sees profit for L&T climbing 28 per cent YoY to Rs 2,849.10 crore compared with Rs 2,229 crore in the same quarter last year. Revenue is seen rising 18 per cent YoY Rs 50,278.30 crore from Rs 42,762.60 crore in the year-ago quarter. Ebitda margin is seen at 10.5 per cent against 10.2 per cent in June and 11.5 per cent in the year-ago quarter.

"We expect L&T's order inflows at Rs 85,000 crore-plus, we have factored in 3 orders which includes: i) Two orders from Aramco for setting up a gas processing plant and its main process units estimated at $2.9 billion, while the second contract to construct gas compression units is worth $1 billion, and mega order from the Mumbai Metropolitan Region Development Authority (MMRDA) to design and construct an underground road tunnel," it said.

HDFC Institutional Equities, which sees L&T Q2 profit rising 30 per cent YoY, said even as the government capex and initiatives and Middle East hydrocarbon ordering have shown strong momentum, private capex is yet to show its best. L&T's FY26 strategic plan, it noted, is to focus on making subsidiaries self-sustainable, strong presence into green energy (hydrogen, battery storage etc.) and non-core exits.

"With robust order inflow growth, commodity prices cooling-off, refinancing of Hyderabad metro etc., margins may see expansion starting H2FY24, however, being flattish in Q2FY24," it said.

Prabhudas Lilladher peg's L&T Q2 profit at Rs 2,659.50 crore, up 19.3 per cent. It sees L&T sales growth 17 per cent YoY to Rs 50,030 crore, up 17 per cent YoY.

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