L&T profit margins narrowed but strong order book in Q1FY16

Larsen & Toubro (L&T) announced its June 2015 quarter results. The company's net sales increased by 6.73 per cent to Rs 20252 crore in Q1FY16 as compared to the same period in previous fiscal year. The company acquired new orders worth Rs 26376 crore during Q1FY16. International orders during the quarter stood at Rs 8110 crore constituted 31 per cent of the total order inflow. L&T secured major orders from infrastructure and hydrocarbon segments.The consolidated order book of the group stood at Rs 2.38 lakh crore as on 30 June 2015, higher by 22 per cent on yearly basis. International order book constituted 26 per cent of the total order book.

L&T's total expenditure increased by 9.1 per cent to Rs 17962 crore in Q1FY16 on yearly basis. The company's total expenditure increased predominantly due to a 20.14 per cent increment in raw material prices, 19.02 per cent increment in employee cost, and 7.27 per cent increment in operating and manufacturing expenses during Q1FY16.

EBITDA of L&T declined by 8.79 per cent to Rs 2290 crore in Q1FY16 compared to same period in previous financial year. The EBITDA margin of the company contracted by 192 basis points to 11.31 per cent in Q1FY16 on yearly basis. Its EBIT decreased by 2.1 per cent to Rs 1668 crore in Q1FY16 on yearly basis though its depreciation expenses reduced by 22.92 per cent to Rs 622 crore during the quarter. L&T's PBT decreased by 16.29 per cent to Rs 1219 crore in Q1FY16 on yearly basis as it had exceptional gain of Rs 249.28 crore in Q1FY15 on divestment of subsidiary against zero exceptional gain in Q1FY16. The company's net profit declined by 37.32 per cent to Rs 606 crore in Q1FY16 as compared to the same period in previous financial year. Its net profit margin contracted by 211 basis points to 2.99 per cent in Q1FY16 on yearly basis.

Considering segment wise revenue L&T earned 40.58 per cent from Infrastructure segment, a 10.57 per cent from Hydrocarbon segment, a 10.14 per cent from IT & Technologies,a 8.54 per cent from Financial services segment, 5.77 per cent from developmental projects segment, 5.44 per cent from Electrical and Automation segment, 5.38 per cent from Power segment, 3.13 per cent from Heavy Engineering segment, 2.64 per cent from Metallurgical and Material handling segment and remaining 7.81 per cent from Others segment during June 2015 quarter.

L&T's shareholding pattern indicates that FII holdings contracted by 62 basis points to 16.18 per cent and DII holdings expanded by 341 basis points to 39.5 per cent during June 2015 quarter. The stock on BSE declined by 4.43 per cent and trading at Rs 1771 on intraday basis.

L&T is an India based technology, engineering, construction and manufacturing company. The company operates in 5 segments includes Hydrocarbon, IT & Technology Services, Financial Services, Developmental Projects and Others comprising Realty, Shipbuilding, Ready Mix Concrete, Mining and Aviation. The Company’s manufacturing footprint extends across eight countries in addition to India. L&T has several international offices and a supply chain that extends around the globe.