Larsen & Toubro Ltd. |Q2FY15 Result Update | Mixed Performance :: IndiaNivesh

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Led by growth in infrastructure segment and challenging execution conditions in
power, metals and hydrocarbon segments, L&T reported moderate y-o-y growth of
10.6% in top-line to Rs 211.59 bn. On account of slower execution, cost overruns in
some projects and under-recoveries in many segments of the company, L&T EBITDA
margin declined y-o-y by 205 bps to 11%. Consequently EBITDA for the quarter
reported y-o-y 6.8% decline to Rs 23.34 bn. Selling off of certain assets along with
change in depreciation policy of the company has helped the company in reducing
the depreciation charge y-o-y by 6.6% to Rs 5.49 bn. Lower depreciation and interest
costs has helped the company in reporting growth of 6% in adj.net profit to Rs 8.62
bn. (adjusted for exceptional and extraordinary items).
Mixed Performance
Consolidated Results:
Rs Bn Q2FY15 Q1FY15 Q2FY14 q/q y/y
Net Revenue 211.59 189.75 191.31 11.5% 10.6%
EBITDA 23.34 25.15 25.03 -7.2% -6.8%
Adj net Profit 8.62 7.18 8.13 20.1% 6.0%
Adj EPS-Diluted (Rs) 9.23 7.69 8.71 20.1% 6.0%
Consolidated Source: Company filings, IndiaNivesh Research
Segment wise performance:
 Infrastructure segment has shown a robust sales growth of 26.4% to Rs 98.41
bn, on back of large order book and on-track execution. Operating margin
(EBIT) however has declined by 231 bps to 8.4% on account of job-mix change
and extra claim settlement in previous year.
 Low order book in power segment has caused the segment revenue to decline
by 19.3% to Rs 11.66 bn. Intense competition in the sector and lower utilization
levels have taken a toll on the margin of the segment which has declined
from 29.7% to 9.7% y-o-y. Management expects likely pick up in power
generation orders, which can increase the order book and revenue of the
segment in coming quarters.

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