Larsen & Toubro’s (L&T) group order inflow crossed INR 3 trillion for the first time ever in FY24 on the back of capex tailwinds. The company has completed many landmarks and prestigious projects in the country. The infrastructure giant has a strategic plan which aims to achieve group order inflow of INR 3.4 trillion and group revenue of INR 2.7 trillion by FY26.
The aggregate prospect pipeline for FY25 is around INR 12.1 trillion, up 24% on y-o-y basis as compared with INR 9.7 trillion in same period last year. The increase is largely due to the improvement in the infrastructure and hydrocarbon prospects pipeline. The breakup of pipeline is as follows: Infrastructure- INR 7.25 trillion, Hydrocarbon- INR 3.87 trillion, Power- INR 0.5 trillion, Green Energy- INR 0.1 trillion.
Key takeaways:
Order inflow rises 31% y-o-y: The company’s order inflow registered 31% growth on y-o-y basis to INR 3,028 billion in FY24 against INR 2,305 billion in FY23. Meanwhile, the same dropped by 5% y-o-y to INR 721 billion in Q4FY24. The Projects and Manufacturing business portfolio (Infrastructure, Hydrocarbon and Defence or Precision Engineering) secured order inflows of INR 560 billion in Q4FY24.
Order book up 20%: Order book stood at INR 4.76 trillion in FY24, up 20% on the year from INR 3.97 trillion. Around 90% share of order book comprises of Infrastructure and Energy. Out of the total, 62% of order book is domestic and balance of 38% is international. The composition of domestic order book of INR 2.95 trillion is as follows: Central Government- 14%, State Government- 28%, Public Sector Corporation or State-Owned Enterprises-36% and Private Sector- 22%.
Revenue grows 21% y-o-y: The company’s revenue registered 21% growth y-o-y to INR 2,211 billion in FY24. In Q4FY24, the same was up by 15% on the year to INR 671 billion driven by strong execution momentum of Infrastructure, Precision Engineering & Systems and Realty within the Projects and Manufacturing portfolio.
Segment wise performance:
Infrastructure segment: The order inflow in the segment was INR 1,423 billion (47% of total inflow) in FY24. During the quarter, the segment secured orders of INR 313 billion, down by 24% from INR 412 billion in same period previous year. The sub-segment breakup of INR 7.25 trillion prospects pipeline in infrastructure segment is as follows-
Hydrocarbon segment: The hydrocarbon business has a strong order prospect pipeline of INR 4.36 trillion for FY25, comprising of Hydrocarbon prospects of INR 3.86 trillion and Power prospects of INR 0.5 trillion.
Hi-Tech manufacturing segment: The Hi-Tech manufacturing has order book of INR 320 billion as of March 2024 and prospects pipeline in FY25 is around INR 346 billion. The business was benefited from the receipt of a significant order from a key oil and gas customer in the Middle East.
Outlook: India’s growth momentum is likely to continue in the medium term, backed by the sustained strength in domestic demand, easing on inflationary process, focused fiscal spending by the government, and a strong manufacturing revival through new age greenfield investments and brownfield expansion across sectors. A combination of public and private capex spending is expected to propel the country’s growth in the coming years.