Subscribe to enjoy similar stories. Before Larsen & Toubro Ltd’s (L&T) September quarter (Q2FY25) earnings were out on Wednesday, its shares had fallen by 7% over the previous month. Weak government spending in the first half of FY25 due to the general elections and global geopolitical tensions were anticipated to mar L&T’s order inflows last quarter.
But the industry bellwether positively surprised the Street with the core—projects & manufacturing order inflows—of ₹63,028 crore, exceeding analysts’ estimate of ₹55,000-57,000 crore. A large part of inflows was from the infrastructure segment, driven by international projects, compensating for muted domestic inflows. Order inflows fell 14% year-on-year due to a high base as L&T had bagged two ultra-mega orders in Q2FY24.
But the Street is drawing comfort from management confidence as L&T has retained its order inflow growth of 10% for FY25. This is despite total prospective order pipeline falling 8% to ₹8.08 trillion for the rest of FY25 due to lower hydrocarbon order pipeline. Still, L&T’s order inflow target may not be tough to meet.
According to BNP Paribas Securities India, while order wins needed for H2FY25 at ₹1.8 trillion appear steep versus ₹1.5trillion in H2FY24, it should be noted that L&T is already well-placed with ₹0.3 trillion of thermal power tenders. “Thus, it has to secure order wins similar to H2FY24 levels, which we do not view as particularly challenging," said the BNP report dated 30 October. L&T’s total order book stood at ₹5.1 trillion as on September-end, up 13% year-on-year, with 60% being domestic orders and 40% international.
Thus, providing robust revenue visibility. Obviously, execution is the key here. With elections out of way, the
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