L&T Financial Performance for the period ended June 30, 2022

Mumbai, July 27, 2022 Larsen & Toubro achieved Consolidated Revenues of ₹ 35,853 crore for the quarter ended June 30,2022 recording a y-o-y growth of 22% with strong execution witnessed in the Infrastructure Segment and riding on the sustaining growth momentum in the IT&TS portfolio. International revenues during the quarter at ₹ 13,235 crore constitute 37% of the total revenue. The Company for the quarter ended June 30, 2022, posted Consolidated Profit After Tax
(PAT) of ₹ 1,702 crore registered a robust growth of 45% over the corresponding quarter of the previous year.
The Company secured orders worth ₹ 41,805 crore at the group level during the quarter ended June 30, 2022, registering a growth of 57% over corresponding quarter of the previous year. During the quarter, orders were received across diverse segments like Public Spaces, Metros, Water Management & Waste Water, Minerals and Metal, Factories, Data Centers,
Defence, Power Transmission and Distribution and Hydrocarbon Offshore sectors.
International orders at ₹ 17,842 crore during the quarter comprised 43% of the total order
inflow. The consolidated order book of the group is at a record ₹ 363,448 crore as on June 30, 2022,
with international orders having a share of 28%.
Effective from April 1, 2022, the operating segments have been re-organised, in line with
the business strategy to be adopted by the Company under its 5 year plan (Lakshya 2026).
Some of the existing segments have been realigned to reflect the Group’s Lakshya 2026
strategy. The changes are as follows:
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• Energy Projects – This is a newly formed segment that constitutes the current segments
of Hydrocarbon and Power, to reflect the Group’s entry into Green Energy space and
integrated pursuit of opportunities in a rapidly transforming Energy sector
• Hi-Tech Manufacturing – This is a segment that comprises the Heavy Engineering and
Defence Engineering businesses, being combined, to leverage the extensive engineering,
manufacturing and fabrication expertise across the various customer segments
• IT & Technology Services – The segment earlier comprising of the listed IT&TS
subsidiaries of the Group viz., (a) L&T Infotech (b) L&T Technology Services and
(c) Mindtree, will now also include the new age businesses of Data Centers and
E-commerce / Digital Platforms (both the businesses were earlier reported under
‘Others’ segment in the previous year)
Infrastructure Projects Segment
The Infrastructure Projects segment secured order inflows of ₹ 18,343 crore, during the
quarter ended June 30, 2022, registering growth of 66% compared to corresponding quarter
of the previous year with various orders secured across sub segments. International orders
at ₹ 4,691 crore constituted 26% of the total order inflow of the segment during the quarter.
The segment order book stood at ₹ 263,977 crore as on June 30, 2022, with the share of
international orders at 23%.
The segment recorded customer revenues of ₹ 14,181 crore for the quarter ended
June 30, 2022, registering y-o-y growth of 36% aided by improved execution momentum as
the Covid related challenges receded in the current quarter. International revenues
constituted 19% of the total customer revenues of the segment during the quarter.
The EBITDA margin of the segment during the quarter ended June 30, 2022 was at 6.5%
vis-à-vis 7.1% recorded in the corresponding quarter of the previous year. Margins for the
quarter have been impacted by input cost escalations and change in revenue mix.
Energy Projects Segment
The Energy Projects Segment secured orders valued at ₹ 4,366 crore during the quarter
ended June 30, 2022, registering substantial growth compared to corresponding quarter of
the previous year, with receipt of a large order from Middle East in the Offshore vertical of
Hydrocarbon business. International order inflow constituted 91% of the total order inflow
of the segment during the quarter.
The segment order book was at ₹ 65,372 crore as on June 30, 2022, with the international
order book constituting 58%.
The segment posted customer revenues of ₹ 5,073 crore during the quarter ended
June 30, 2022, recording a growth of 3% y-o-y, largely attributed to pickup of execution
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momentum in the Power business. International revenues had a share of 30% of the total
customer revenues for the quarter.
The EBITDA margin of the segment at 8.5% for the quarter ended June 30, 2022 improved
compared to 7.5% over corresponding quarter of the previous year, on account of execution
cost savings in few projects.
Hi-Tech Manufacturing Segment
The segment secured orders valued at ₹ 3,489 crore during the quarter ended June 30, 2022
registering substantial growth y-o-y with receipt of a key order in the Defence Engineering
business. Export orders constituted 7% of the total order inflow of the segment during the
quarter.
The order book of the segment was at ₹ 19,398 crore as on June 30, 2022, with the share of
export orders at 12%.
The segment posted customer revenues of ₹ 1,272 crore for the quarter ended
June 30, 2022, recording a marginal y-o-y growth of 3%. Export sales comprised 19% of the
total customer revenues for the quarter.
The EBITDA margin of the segment at 15.1% for the quarter ended June 30, 2022 declined
compared to 19.2% reported in the corresponding quarter of the previous year, since
previous year was higher on release of cost provisions on completion of a key project and
recognition of customer claims.
IT & Technology Services (IT&TS) Segment
The segment recorded customer revenues of ₹ 9,424 crore for the quarter ended
June 30, 2022, registering a y-o-y growth of 30% reflecting continued growth momentum in
the IT&TS sector. International billing contributed 92% of the total customer revenues of
the segment for the quarter ended June 30, 2022. The revenue in USD terms for the 3 listed
entities at USD 1,219 Mn, registered a sequential growth of 3%.
The EBITDA margin for the segment was at 22.2% for the quarter ended June 30, 2022 as
compared to 22.8% in the corresponding quarter of the previous year. Improved operational
efficiencies was offset by higher employee cost.
Financial Services Segment
The segment reflects the performance of L&T Finance Holdings, a listed subsidiary. The
segment recorded income from operations at ₹ 2,958 crore during the quarter ended
June 30, 2022, registering a y-o-y decline of 3%, mainly attributed to the targeted reduction
in the wholesale loan book.
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The total Loan Book remained steady at ₹ 88,078 crore as compared with June 2021 at
₹ 88,440 crore, reflecting a cautious lending approach, focus on collections, portfolio sell
down and a phased liquidation of the de-focused business and wholesale loan book.
The segment EBIT for the quarter ended June 30, 2022 increased to ₹ 356 crore as compared
to ₹ 234 crore in the corresponding quarter of the previous year due to savings in credit cost
and higher fee income.
Development Projects Segment
The segment recorded customer revenues of ₹ 1,345 crore registering growth of 19% over
the corresponding quarter of the previous year, driven by a higher PLF in the Nabha Power
plant and increase in ridership in Hyderabad Metro.
The segment EBIT for the quarter ended June 30, 2022 registers a loss of ₹ 21 crore as
compared to loss of ₹ 91 crore during the corresponding quarter of the previous year, due
to improved metro ridership.
“Others” Segment
“Others” segment comprises (a) Realty, (b) Construction & Mining Machinery, (c) Rubber
Processing Machinery, (d) Industrial Valves and (e) Smart World and Communication
businesses.
Customer revenues during the quarter ended June 30, 2022 at ₹ 1,599 crore registered a
growth of 21% y-o-y with higher handover of flats in the Realty business and increase in sales
of Rubber Processing Machinery. Export sales constituting 6% of the total customer revenues
of the segment during the quarter majorly pertains to export of Industrial Valves and Rubber
Processing Machinery.
During the quarter ended June 30, 2022, the segment EBITDA margin at 17.2%, remains
stable compared to 17.1% during the corresponding quarter of the previous year.
Note:
Segment-wise summary of performance for the quarter ended June 30, 2022 is attached in
Annexure 1
Outlook
The Indian economy continues to sustain the strong recovery momentum evidenced by
robust monthly high frequency indicators. With the Government’s move to cut taxes on
petrol and diesel, imposition of export duty on steel and petroleum, restrictions on food
exports and RBI’s recent action of increasing the REPO rate should ease the overall
inflationary pressure.
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India, however, faces near-term challenges in reining the fiscal deficit and yet manage to
sustain the economic growth momentum despite a higher inflation and a more adverse
balance of payments situation. The Government’s persistent efforts to jumpstart economic
growth through higher infrastructure spend and incentivizing domestic manufacturing should
yield benefits in the medium term.
On the global front, oil price dynamics and recent geo-political developments have led the
global economy towards a zone of uncertainty in an environment of high inflation, volatile
commodity prices, imposition of sanctions and resultant supply chain disruptions. The Middle
east region, an important geography for the Company’s Projects business, is likely to be
benefitted from the high oil prices resulting in higher hydrocarbon and infrastructure capex
spend. This augurs well for the Company, in terms of providing a larger scope of contracting
opportunities.
The Company in its first year post announcing its Lakshya 2026 Strategic Plan, expects to
continue its planned trajectory of profitable growth through an efficient and timely
execution of its large order book and along with its many value enhancing measures, retain
its leadership position and improve shareholder return on a sustainable basis. The Company
is on the path of diversification into the new businesses of Green Energy and E-commerce
Platforms and at the same time pursue exit options / limit exposure in non-core businesses
over the Lakshya 2026 strategic plan period.
Background:
Larsen & Toubro is an Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and
Services. It operates in over 50 countries worldwide. A strong, customer–focused approach and the
constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major
lines of business for eight decades.