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UBS Investment Research
L & T
Q 1 FY12 results preview
Event: Q1 FY12 results on 8th August, Monday; we expect PAT of Rs7.3bn
We expect Q1FY12 (standalone) revenues of Rs93.8bn (+20% y/y, consensus
Rs95bn), operating profit of Rs11.3bn (+12% y/y, consensus Rs11.4bn), EBITDA
margins of 12% (-85bps y/y, in-line with consensus) and PAT of Rs7.3bn (+10%
y/y; consensus Rs7.8bn). Our estimates are 1% lower than consensus on
revenues/operating profit and 6% below consensus on PAT. L&T has declared new
orders worth ~Rs106bn during Apr-Jun 2011 in Buildings (Rs41bn), Metallurgy
(Rs16bn) and Power (Rs49bn).
Impact: Q1 contributes ~18% of full year profit
Q1 typically contributes 19% of full year revenues and ~18% of EBITDA/PAT.
FY12 revenue growth could be back-ended (like last year) as order-inflows were
skewed towards Q4 last year (38% of FY11 orders were won in Q4- such a large
skew has not been seen in previous years). In Q1FY11, revenue growth was 6.4%,
while full year FY11 growth was ~19%. We project ~22% revenue growth
(guidance 25%), 60bps dip in margins (guidance 50-75bps downside risk) and 15%
order inflow growth (guidance 15-20%) at the standalone level for FY12.
Action: Maintain Buy, Top pick in Indian infrastructure space
The earnings conference call is at 5pm on 8th August. We like L&T for its strong
competitive advantages, across-the-spectrum presence, good execution track record
and robust balance sheet.
Valuation: SOTP-based PT of Rs2,100
We maintain our Buy rating with SOTP-based price target of Rs2,100
L & T
Larsen and Toubro (L&T) is India's largest engineering and construction (E&C)
company, and is the only dedicated engineering procurement and contracts
(EPC) company in India. It also has interests in electrical goods such as
switchgears and control panels. L&T has several subsidiaries engaged in various
businesses such as IT services, financing of industrial equipment, collection of
toll from roads constructed under the BOT scheme, and power generation. It has
also diversified into shipbuilding and power plant equipment businesses.
Statement of Risk
We believe the main risks to our price target and estimates are: 1) a change in
order inflow estimates, 2) execution issues.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
UBS Investment Research
L & T
Q 1 FY12 results preview
Event: Q1 FY12 results on 8th August, Monday; we expect PAT of Rs7.3bn
We expect Q1FY12 (standalone) revenues of Rs93.8bn (+20% y/y, consensus
Rs95bn), operating profit of Rs11.3bn (+12% y/y, consensus Rs11.4bn), EBITDA
margins of 12% (-85bps y/y, in-line with consensus) and PAT of Rs7.3bn (+10%
y/y; consensus Rs7.8bn). Our estimates are 1% lower than consensus on
revenues/operating profit and 6% below consensus on PAT. L&T has declared new
orders worth ~Rs106bn during Apr-Jun 2011 in Buildings (Rs41bn), Metallurgy
(Rs16bn) and Power (Rs49bn).
Impact: Q1 contributes ~18% of full year profit
Q1 typically contributes 19% of full year revenues and ~18% of EBITDA/PAT.
FY12 revenue growth could be back-ended (like last year) as order-inflows were
skewed towards Q4 last year (38% of FY11 orders were won in Q4- such a large
skew has not been seen in previous years). In Q1FY11, revenue growth was 6.4%,
while full year FY11 growth was ~19%. We project ~22% revenue growth
(guidance 25%), 60bps dip in margins (guidance 50-75bps downside risk) and 15%
order inflow growth (guidance 15-20%) at the standalone level for FY12.
Action: Maintain Buy, Top pick in Indian infrastructure space
The earnings conference call is at 5pm on 8th August. We like L&T for its strong
competitive advantages, across-the-spectrum presence, good execution track record
and robust balance sheet.
Valuation: SOTP-based PT of Rs2,100
We maintain our Buy rating with SOTP-based price target of Rs2,100
L & T
Larsen and Toubro (L&T) is India's largest engineering and construction (E&C)
company, and is the only dedicated engineering procurement and contracts
(EPC) company in India. It also has interests in electrical goods such as
switchgears and control panels. L&T has several subsidiaries engaged in various
businesses such as IT services, financing of industrial equipment, collection of
toll from roads constructed under the BOT scheme, and power generation. It has
also diversified into shipbuilding and power plant equipment businesses.
Statement of Risk
We believe the main risks to our price target and estimates are: 1) a change in
order inflow estimates, 2) execution issues.
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