L&T shares up 2.27% after Q1 profit surges 12% to ₹2,786 cr

Shares of engineering and construction giant Larsen & Toubro (L&T) have surged over 2.27% on the NSE today, following the company's announcement of a 12% year-on-year increase in consolidated net profit, reaching ₹2,786 crore for the quarter that ended on June 30, 2024. Consolidated revenues also grew by 15% year-on-year to ₹55,120 crore, with international revenue accounting for 48% of the total. This growth is primarily attributed to L&T's robust Projects & Manufacturing (P&M) portfolio and a large order book.

Boosted by robust order growth in the Middle East, the company received orders worth ₹70,936 crore at group level registering a year-over-year growth of 8% in the first quarter. With 38% of its orders coming from abroad, the group’s consolidated order book for the quarter that ended on June 30, 2024, stood at ₹4.9 lakh crore.

These orders came from multiple segments of the company including the offshore vertical of the hydrocarbon business, renewables, transmission & distribution, roads, nuclear power, hydel & tunnel, ferrous metals, health, and precision engineering sectors. The maximum order inflows were seen from the infrastructure projects segment, followed by IT & Technology services and energy projects.

The company’s EBITDA grew by 15% year-on-year from ₹4,869 crore to ₹5,615 crore.

“The Financial Services portfolio has achieved a remarkable transformation into Retail Finance with improved profitability,” said S.N. Subrahmanyan, Chairman and Managing Director of the company. “To enhance our presence in the Semiconductor sector, we have recently entered into a share purchase agreement with SiliConch Systems, a Bengaluru-based chip design company,” he adds.

Recently global credit rating agencies assigned 'BBB+' ratings to the company, placing it two notches above the sovereign rating highlighting the conglomerate’s exceptional credit quality and strong financial health. Furthermore, MSCI ESG Research has upgraded the company's ESG rating to 'BBB,' acknowledging its improved performance in Environmental, Social, and Governance parameters.

“With the expected policy continuation in India, the tailwinds in the Indian economic growth is likely to continue which will facilitate the Group to achieve its Lakshya 26 targets,” adds Subrahmanyan, commenting on the Union Budget.

While the shares are currently trading at ₹3,576.70, yesterday they closed 0.45% lower at ₹3,522 on the NSE.