Larsen & Toubro (L&T) is seen recording an annual rise in net profit and revenue in the June quarter with higher order inflows in the engineering and construction business, more project executions, and lower raw material costs that will boost margins.

Analysts have forecast the engineering, construction and technology services company to post a consolidated net profit of ₹2,050 crore in the June quarter, up about a fifth on year while revenue is expected to rise 13 per cent to ₹40,506 crore. Sequentially, the net profit is seen falling over 48 per cent and the revenue down nearly 31 per cent.

Also read: L&T transitions $150-million term loan with BoA to green loan

L&T will be announcing its results for the first quarter of FY23 later in the day.

Exchange filings by the company show that during the quarter the company has been getting sizeable orders across all its segments such as electricity transmission, distribution, defense, buildings, and oil and gas. It got orders both from India as well as the Middle East. US investment bank Jefferies pegged the size of the orders at around ₹9,000 crore and expects more orders in the current quarter ahead of the general elections.

In the March quarter, cost pressures squeezed the profitability of the company but raw material prices have eased since then. Analysts are expecting the operating margin to get a boost following this.

Kotak Institutional Equities expects a consolidated margin improvement by 29 basis points while the engineering and construction segment’s margin is likely to have expanded by 50 bps to 8.7 per cent. The brokerage firm also said that revenue from its core operations (excluding technology services) is likely to see a 12 per cent bump up in the quarter with construction activity having picked up.

Also read: L&T plays critical role in Chandryaan 3 launch

The company said it will also be considering its first ever share buyback.

At 11.28 a.m., shares of L&T were down 1.23 per cent at ₹2,573.10 on the NSE.

Related Topics