Larsen & Toubro (L&T) Poised for Revenue Growth Amid Strong Orders
Key Ideas
- L&T is expected to see an 8% year-on-year growth in revenue, with a flat EBITDA margin, attributed to projects in multiple sectors.
- The company reported a 10% increase in net profit and a 15% increase in total revenue from operations for the quarter ending March 31.
- Analysts anticipate a 12% consolidated revenue growth, mainly driven by a 14% increase in the Engineering & Construction (E&C) sector.
- While the company faces potential project execution challenges due to labor shortages, the growth outlook remains positive, especially with orders from the Middle East and the domestic market.
Larsen & Toubro (L&T) is set to experience a surge in revenue in Q1 FY25, fueled by a substantial influx of orders from the Middle East and the domestic market. The growth trajectory of L&T is linked to its involvement in various sectors such as infrastructure, hydrogen, solar, and heavy engineering. Market analysts forecast an 8 percent year-on-year revenue growth for L&T, with a stable EBITDA margin. Despite potential challenges in project execution due to labor shortages, the company previously recorded a commendable performance, with a 10 percent rise in consolidated net profit and a 15 percent increase in total revenue from operations in the quarter ending March 31. Looking ahead, a 12 percent consolidated revenue growth is expected, particularly driven by a 14 percent increase in the Engineering & Construction (E&C) sector. While monitoring project execution in the Middle East, especially in Saudi Arabia, analysts remain optimistic about L&T's performance, projecting a consistent EBITDA margin of 7.5 percent. Despite labor constraints, the company's growth outlook remains positive, supported by its order book strength and diverse project portfolio.