L&T trades flat ahead of Q4 earnings; check analysts' expectations and key things to track

Shares of Larsen & Toubro (L&T) were trading flat with a negative bias in the morning trade on May 10, 2023. The engineering & construction major is slated to release its March quarter numbers today. As per analysts, most EPC companies are expected to report strong order inflows with healthy execution. EPC stands for Engineering, Procurement and Construction.

ZEE Business Research expects L&T's consolidated revenue for the quarter under review to come in at Rs 59,311.1 crore, up 12.2 per cent year-on-year (YoY). EBITDA or earnings before interest, tax, depreciation, and amortisation is pegged at Rs 7,218.9 crore, up 11 per cent against Rs 6,520.49 crore logged in the year-ago period. EBITDA margin is seen at 12.2 per cent against 12.34 per cent in the year-ago quarter. The net profit of the company is expected to rise 16 per cent YoY to Rs 4182.8 crore. Margin guidance and order inflow guidance will be key things to track.

ICICI Securities notes that during Q4FY23E, EPC order inflows announced by L&T were in the range of nearly Rs 20,000 - Rs 31,500 crore across the railway, hydrocarbon, power T&D, water treatment, heavy engineering, buildings & factories segments indicating strong order inflows for the quarter amid challenging environment globally.

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"We expect strong execution pick-up YoY. In our view, working capital and cash flow management will be key monitorable. Consequently, we expect standalone revenue to grow by 12.1 per cent to Rs 4,1971.5 crore. EBITDA is expected to grow 12.9 per cent to Rs 4,369.2 crore with margins expected at 10.4 per cent owing to better execution. Adjusted PAT (ex-E&A) is expected to grow 16.9 per cent to Rs 3,392.7 crore on account of operating leverage and lower finance costs," said analysts at ICICI Securities in its earnings preview note.

At the time of writing this report, the stock was trading 0.33 per cent lower at Rs 2,366 apiece on the BSE. In comparison, the benchmark S&P BSE Sensex quoted at 61,679, down 82 points, or 0.13 per cent.