Larsen and Toubro Q3FY23 profits up 24 per cent on strong order book

India’s largest capital goods and engineering services company, Larsen and Toubro (L&T) reported 24% higher net profits for Q3FY23 at Rs2,553 crore. For the same period, the top line revenues of L&T were 17% higher at Rs46,390 crore. The big triggers for top line growth came from better execution of infrastructure projects and sustained growth momentum in the IT portfolio of L&T comprising of LTI Mindtree and LTTS. Global revenues comprised 37%.

For the December 2022 quarter (Q3FY23), L&T secured 21% higher orders at Rs60,710 crore overall. Global orders accounted for 25% of the total orders received in the quarter. L&T has always had an impressive order book and it currently stands at Rs386,588 crore overall as of December 2022. Nearly one-fourth of the overall order book comprised of international orders.

The order flow and the order book was largely dominated by the infrastructure sector. For the quarter, infrastructure orders were up 28% yoy at Rs32,530 crore. Out of the total outstanding order book of Rs386,588 crore for L&T, the infrastructure segment accounted for 72% at Rs278,967 crore. Within the infrastructure sector, the energy projects segment was a key driver with nearly 50% of the order book coming from abroad.

While the top line for L&T was driven by the infrastructure segment, it was the IT and Technology services (IT&TS) that dominated the profit and margin contribution. The L&T IT portfolio comprises of LTTS and LTI Mindtree (formed by the merger of L&T Infotech and Mindtree Ltd last year).

The merger was officially given effect in the December 2022 quarter. For the latest quarter, the IT&TS segment had the best EBITDA margin among various businesses of L&T at 19.2%. IT services revenues at Rs10,517 crore were next to infrastructure.