The company’s consolidated order book grew 19% year-on-year (y-o-y) in the June quarter, with the share of international orders at 38%.
“We see a very strong order pipeline—60% of this is from domestic opportunities and the rest from overseas,” R. Shankar Raman, president and group CFO of L&T, said in a media call after announcing the company’s Q1 results for FY25.
In the April-June quarter, L&T’s consolidated revenues jumped 15% y-o-y to ₹55,120 crore, beating Bloomberg estimates of 13 analysts, which had predicted ₹53,600 crore. It also posted a consolidated net profit of ₹2,786 crore, 12% higher y-o-y.
The company attributed the higher revenues to a “robust execution” in its projects and manufacturing portfolio, with ₹26,248 crore or 48% of the Q1 revenues flowing in from international orders alone.
In a statement, S.N. Subrahmanyan, L&T’s chairman and managing director said, “We have achieved steady growth across all financial parameters in Q1 FY 2024-25, despite the geopolitical situation across the globe.”
Shankar Raman said there were orders worth about ₹40,000 crore from infrastructure projects in the first quarter, somewhat similar to last year.
“We knew it (the order flow) will be slow due to elections; still, we maintained the order flow,” said Shankar Raman, adding that domestic orders declined 20% y-o-y but international orders grew 42% y-o-y in the quarter. “That’s how we maintained the overall order flow at similar levels like last year.”
L&T’s shares closed 0.54% down at ₹3,519.40 on BSE on Wednesday. The results were announced after market hours.
Order details
During the quarter, the company said it got orders from offshore verticals of hydrocarbon business, renewables, transmission and distribution, roads, nuclear power, hydel and tunnel, ferrous metals, health, and precision engineering sectors. International orders at ₹32,598 crore during the quarter comprised 46% of the total order inflow.
In the energy and manufacturing segments, Shankar Raman said, the order book was at around ₹8,790 crore and ₹3,680 crore, respectively, during the quarter, with the domestic market contributing a majority in both verticals.
Of the ₹4.9 trillion order book currently, Shankar Raman said, 56% is from infrastructure sector and 24% is from energy constituting hydrocarbon vertical.
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L&T, which has recently won a 15GW solar plant project order in West Asia, hopes to receive equally big projects globally this year on the back of its recently-awarded benign credit ratings.
In the June quarter, L&T received fresh orders worth ₹70,936 crore at the group level, an 8% y-o-y growth aided by the strong ordering momentum in the Middle East, said the company in a statement.
L&T, whose rating at BBB+ from global rating agencies S&P and Fitch, is two notches higher than India’s rating itself, feels this rating tag will help the conglomerate win more marquee international projects in the coming days.
“This works as a good template as an international endorsement. As far as raising capital is concerned, whenever we are in the market, it helps us in securing approvals from various credit committees,” said Shankar Raman.
The green drive
L&T, which is competing with large conglomerates such as the Tata Group, RIL, Adani Group and Vedanta in terms of leveraging the country’s transition to net-zero, is planning to expand its green energy portfolio too in the ongoing fiscal.
Shankar Raman said while L&T is expanding its green EPC business, the prime focus will be on building solar plants, offshore wind business, green hydrogen business and ammonia production business.
L&T has tied up with a French company to manufacture alkaline-technology-based electrolyzers, which is the basic component to produce green hydrogen.
“We see demand coming from both private players and PSUs for such electrolyzers and green hydrogen. We are building a 1 MW capacity electrolyzer manufacturing capacity this year that may cost around $100 million,” said Shankar Raman.
Shankar Raman said L&T has also taken an allotment of a land parcel in Gujarat for the production of Ammonia, adding that the plans are at a preliminary stage.
“We have not yet zeroed in on specific plans on the size of the plant and the financials. Our focus will be the scale of production. The investment will depend upon the market demand and the capacity of the plant. I think by next year we will have a clear plan on capital allocation in this regard,” said Shankar Raman.
In the ongoing fiscal, L&T has earmarked an overall capex of ₹4,000-5,000 crore, Shankar Raman said, which includes expansion in the group’s energy, infrastructure and manufacturing businesses.
Meanwhile, Subrahmanyan said L&T has recently entered into a share purchase agreement with SiliConch Systems, a Bengaluru-based chip design company, to enhance the company’s presence in the semiconductor sector.