Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
It’s finally curtains for this financial year for Larsen and Toubro (LT). The much
discussed order inflow trend looks different and to a certain extent disappointing.
The purpose of this note is to highlight the emerging trends of order inflows through
some data points. However, it would not have any implications on our estimates as
of now.
Picture not perfect: LT’s order inflow stood at Rs495bn at the end of 9MFY12
and in Q4FY12E, the order intake reported in public domain stood at Rs161.8bn
as against Rs300bn in Q4FY11 (actual). With this, the tally for FY12E order inflow
stands at Rs655bn (reported) as against Rs797bn (actual) in FY11. However, as in
Q3FY12, where the unreported order stood at Rs83bn (Rs10.5bn internal BOT
order booking), we hope a similar number would come up this quarter too. The
order inflow number then would stand at Rs735bn for FY12E which is just 8%
de-growth YoY (above our expectation of 10% YoY de-growth).
Nature experiences ‘winds of change’: A sneak peek into the pattern of the
inflows reveals a host of Buildings & Factories (Rs135bn) and Infrastructure
(transportation and urban Infra, Rs187bn) orders. Together, Buildings and
Infrastructure have become almost half of LT’s order inflows (Rs321bn); hence,
moving away from high technology sectors like Hydrocarbon & Power. (Data
points showing changes in inflows are given on the next page).
Our take: This year has not been a complete washout year and the performance
on a high base remains satisfactory. What needs to be seen now is how the
gradual increase in the planned expenditure of the Government pans out. We
are expecting Rs717bn (Flat YoY) worth order inflow in FY13. However, degrowth
on a YoY basis cannot be ruled out. We maintain ‘Accumulate’.
Some surprises for LT in FY12:
Power ‐ Doosan winning the 800mw boiler and BGR winning the Turbine orders
in NTPC bulk tenders. In addition to this, slower moving orders of Jaiprakash
Power venture and PPN IPPs.
Airport‐ No positive news on Abu Dhabi airport (US$12bn).
Hydrocarbons‐ It failed to win the recent ONGC pipeline tenders.
Port/shipbuilding ‐ Lost the Mazagon Docks JV for defense/naval ships. Dhamra
Port expansion not materializing.
Hyderabad metro‐ Moving slow owing to land acquisition issues.
International‐ Order intake healthy from GCC region in electrical business
(Rs47bn) and South East region into Hydrocarbon. Contribution of ME countries
to order inflow increase from 8% in FY11 to 10% in FY12E.
Unlocking investments: Listing of LT Finance Holdings and acquisition of
Fidelity’s Indian AMC business.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
It’s finally curtains for this financial year for Larsen and Toubro (LT). The much
discussed order inflow trend looks different and to a certain extent disappointing.
The purpose of this note is to highlight the emerging trends of order inflows through
some data points. However, it would not have any implications on our estimates as
of now.
Picture not perfect: LT’s order inflow stood at Rs495bn at the end of 9MFY12
and in Q4FY12E, the order intake reported in public domain stood at Rs161.8bn
as against Rs300bn in Q4FY11 (actual). With this, the tally for FY12E order inflow
stands at Rs655bn (reported) as against Rs797bn (actual) in FY11. However, as in
Q3FY12, where the unreported order stood at Rs83bn (Rs10.5bn internal BOT
order booking), we hope a similar number would come up this quarter too. The
order inflow number then would stand at Rs735bn for FY12E which is just 8%
de-growth YoY (above our expectation of 10% YoY de-growth).
Nature experiences ‘winds of change’: A sneak peek into the pattern of the
inflows reveals a host of Buildings & Factories (Rs135bn) and Infrastructure
(transportation and urban Infra, Rs187bn) orders. Together, Buildings and
Infrastructure have become almost half of LT’s order inflows (Rs321bn); hence,
moving away from high technology sectors like Hydrocarbon & Power. (Data
points showing changes in inflows are given on the next page).
Our take: This year has not been a complete washout year and the performance
on a high base remains satisfactory. What needs to be seen now is how the
gradual increase in the planned expenditure of the Government pans out. We
are expecting Rs717bn (Flat YoY) worth order inflow in FY13. However, degrowth
on a YoY basis cannot be ruled out. We maintain ‘Accumulate’.
Some surprises for LT in FY12:
Power ‐ Doosan winning the 800mw boiler and BGR winning the Turbine orders
in NTPC bulk tenders. In addition to this, slower moving orders of Jaiprakash
Power venture and PPN IPPs.
Airport‐ No positive news on Abu Dhabi airport (US$12bn).
Hydrocarbons‐ It failed to win the recent ONGC pipeline tenders.
Port/shipbuilding ‐ Lost the Mazagon Docks JV for defense/naval ships. Dhamra
Port expansion not materializing.
Hyderabad metro‐ Moving slow owing to land acquisition issues.
International‐ Order intake healthy from GCC region in electrical business
(Rs47bn) and South East region into Hydrocarbon. Contribution of ME countries
to order inflow increase from 8% in FY11 to 10% in FY12E.
Unlocking investments: Listing of LT Finance Holdings and acquisition of
Fidelity’s Indian AMC business.
No comments:
Post a Comment