L&T posts a robust Q3

Larsen & Toubro (L&T) posted excellent numbers for Q3FY17, taking all on the Street by surprise. It has been a long while since we saw such a good and robust performance from L&T.

For Q3FY17, the company posted a healthy 39% (YoY) jump in consolidated net profit at Rs.972 crore on meager 1.5% rise in total income at Rs.26,286 crore. Though there was a 9% rise in international revenue, the lackluster growth of just 1% neutralized the overall revenue growth. The company kept the costs steady, almost status quo and that helped pull up the EBITDA – it was up 19% at Rs.2522 crore and margins improved from 8.2% to 9.6%. The 6% drop in interest expense and 14% lower tax outgo, all helped boost the net profit. Other income was up 7% due to higher treasury earnings.

In terms of order inflow, as at 31^st Dec 2016, total order inflow was at Rs.957 billion, up 3% and the order book stood at Rs.2586 billion, up 1%. Order Inflow declined due to muted domestic capex and delay in awards. There was a 10% growth in International orders led by B&F, Heavy Civil and Hydrocarbon Businesses. The good news - Order Book is at more than 2x TTM Revenues.

The company has maintained the EBITDA guidance but has cut the order inflows guidance from earlier 15% to 10% now.

The stock price is reacting positively to this performance, going up 2% to Rs.1466.50. Its 52-week high and low stands at Rs.1615 and Rs.1016.60 respectively.