Margin is the villain of L&T story, for now
₹32,718 crore, aided by improved execution across segments. Further, order inflows from this segment jumped 80% y-o-y to almost ₹50,400 crore buoyed by the Mumbai Ahmedabad High Speed Rail project contract. This went a long way in driving consolidated order inflows, which also got a boost from large orders in the infrastructure and hydrocarbon segments.
The upshot is that L&T’s order book hit an all-time high of ₹4.1 trillion at June-end. Here, domestic order book accounts for 71%, while international constitutes 29%. According to the management, the outlook for ordering in hydrocarbons and renewables remains strong in the Middle East and Saudi Arabia.
Overall, the prospective order pipeline for the rest of this fiscal is robust at ₹10 trillion. The management has maintained its core revenue guidance of 12-15% growth in FY24. This may seem conservative given the robust order pipeline, but the management is considering the possible softening in awarding activity in Q4 due to general elections.
The management also retained its 10-12% order inflows growth target for FY24. After the strong performance seen in Q1, meeting the upper end of the order inflow guidance should not be tough. Meanwhile, L&T’s board has approved a buyback of 33.33 million shares at a maximum price of up to ₹3,000 apiece, a 17% premium to Tuesday’s closing price.
The consideration for the buyback is up to ₹10,000 crore. L&T also approved a special dividend of ₹6 per share. The improved cash distribution should help the company inch closer to its targeted return on equity (RoE) of 18% by FY26.
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