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● Event: We hosted L&T’s management for an NDR in Singapore
last week. Overall, the outlook from management was positive.
Key takeaways are presented below.
● 1Q inflows: For 1Q, management articulated high visibility for
inflows (QTD ~Rs87 bn worth of orders). Order wins include: (1)
two orders of ~Rs10 bn each in Abu Dhabi, (2)~Rs10 bn in
Myanmar, (3) Rs35 bn (3x360MW gas plant) from PPN Power; (4)
Rs22 bn road project (financial closure awaited). L&T is
favourably placed in the Bangalore airport extension project (Rs10
bn).
● Order pipeline: Management reiterated 15-20% growth guidance
for order inflows and highlighted that the bidding pipeline for FY12
is over Rs5,000 bn. Power (BOP, gas projects), hydrocarbons
(Middle East), roads were the key focus areas. Over two-third
orders expected from power and infra and the rest from industrial.
● Revenue visibility: On the revenue front, management highlighted that 90% of revenues for FY12 would stem from current
order book (implies 32-month execution period for the backlog).
Order visibility for 1Q FY12
(1) NHAI road projects worth ~Rs22 bn were awarded recently, (2)
L&T is favourably placed in three oil and gas projects in GCC (two
projects in Abu Dhabi and one order in Oman), (3) recent oil and gas
project win from Thailand and (4) some civil projects. L&T had won
Rs156 bn worth of orders in 1Q FY11 and would need Rs187 bn
worth of wins based on guidance of 15-20% growth for the year (i.e. to
maintain run rate).
With regards to pending orders from Hyderabad metro (~Rs59 bn
booked so far out of an EPC size of ~Rs120 bn) management
highlighted that IDPL will directly place awards for rolling coaches,
and hence, at best, an incremental ~Rs10-20 bn could be booked
later.
On 4Q FY11 orders: Management commented that unannounced
orders included the (1) ~Rs58 bn blast furnace order, (2) process
platform for GSPC, (3) T&D orders, (4) buildings and factories. The
first two are a part of the announced Rs170 bn worth of orders while
the others are a part of the unannounced Rs130 bn worth of wins.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
● Event: We hosted L&T’s management for an NDR in Singapore
last week. Overall, the outlook from management was positive.
Key takeaways are presented below.
● 1Q inflows: For 1Q, management articulated high visibility for
inflows (QTD ~Rs87 bn worth of orders). Order wins include: (1)
two orders of ~Rs10 bn each in Abu Dhabi, (2)~Rs10 bn in
Myanmar, (3) Rs35 bn (3x360MW gas plant) from PPN Power; (4)
Rs22 bn road project (financial closure awaited). L&T is
favourably placed in the Bangalore airport extension project (Rs10
bn).
● Order pipeline: Management reiterated 15-20% growth guidance
for order inflows and highlighted that the bidding pipeline for FY12
is over Rs5,000 bn. Power (BOP, gas projects), hydrocarbons
(Middle East), roads were the key focus areas. Over two-third
orders expected from power and infra and the rest from industrial.
● Revenue visibility: On the revenue front, management highlighted that 90% of revenues for FY12 would stem from current
order book (implies 32-month execution period for the backlog).
Order visibility for 1Q FY12
(1) NHAI road projects worth ~Rs22 bn were awarded recently, (2)
L&T is favourably placed in three oil and gas projects in GCC (two
projects in Abu Dhabi and one order in Oman), (3) recent oil and gas
project win from Thailand and (4) some civil projects. L&T had won
Rs156 bn worth of orders in 1Q FY11 and would need Rs187 bn
worth of wins based on guidance of 15-20% growth for the year (i.e. to
maintain run rate).
With regards to pending orders from Hyderabad metro (~Rs59 bn
booked so far out of an EPC size of ~Rs120 bn) management
highlighted that IDPL will directly place awards for rolling coaches,
and hence, at best, an incremental ~Rs10-20 bn could be booked
later.
On 4Q FY11 orders: Management commented that unannounced
orders included the (1) ~Rs58 bn blast furnace order, (2) process
platform for GSPC, (3) T&D orders, (4) buildings and factories. The
first two are a part of the announced Rs170 bn worth of orders while
the others are a part of the unannounced Rs130 bn worth of wins.
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