Mumbai, :
Revenues and PAT q-o-q higher by 35% and 33% respectively A healthy closing order book at ₹ 327354 crore, up by 8% y-o-y Board recommends a final dividend of ₹ 18 per share
Larsen & Toubro achieved Consolidated Revenues of ₹ 48,088 crore for the quarter January-March 2021, registering sequential growth of 35%, with execution activities normalising on easing of Covid-19 restrictions, prior to onset of the 2nd wave of the pandemic. The revenue growth on a y-o-y basis was 9% evidencing return to pre Covid levels of activity. The International revenues during the quarter at ₹ 15,851 crore constituted 33% of the total revenue.
For the year ended March 31, 2021, the Group recorded Consolidated Revenues at ₹ 135,979 crore from continuing operations, registering a decline of 7%, attributed to revenues lost due to lockdown related disruptions in the first two quarters of the year and new norms of social distancing, quarantine procedure and safety protocols, coupled with supply chain disruptions impacting project execution progress, though with declining severity, throughout the year. The International revenues during the year at ₹ 50,463 crore constituted 37% of the total revenue.
For the quarter, January-March 2021 the consolidated PAT at ₹ 3,293 crore registered a q-o-q increase of 33% and a y-o-y increase of 3% over the profits for similar period last year.
Consolidated Profit After Tax (PAT) including PAT from discontinued operations for the year ended March 31, 2021 at ₹ 11,583 crore registered growth of 21% y-o-y. The consolidated PAT includes a charge of ₹ 3,620 crore towards exceptional items and profit from Discontinued Operations ₹ 8,238 crore, mainly comprising of gain on divestment.
The Board of Directors has recommended a final dividend of ₹ 18 per equity share for the approval of shareholders. During the year the Company had declared a special dividend of ₹ 18 per equity share as an interim dividend, post the divestment of the Electrical & Automation business.
The order inflow for the quarter January-March 2021 at ₹ 50,651 crore, lower by 12% over corresponding period of the previous year with deferment of awards. Significant orders during the quarter were received in various segments like Factories, Hydel and Tunnel, Metros, Special bridges, Nuclear power, Rural water, Renewable energy, Hydrocarbon offshore and Minerals and metal sector. International orders at ₹ 18,439 crore during the quarter is at 36% of the total order inflow, with receipt of biggest Solar PV plant order and Transmission line orders.
The Company received orders worth ₹ 175,497 crore at the group level during the year ended March 31, 2021, registering decline of 6% compared to the previous year in the face of Covid disrupted business environment in first half of the year. International orders at ₹ 47,951 crore during the year dropped to 27% of the total order inflow, with subdued overseas opportunities, especially in Middle East.
The consolidated order book of the group stood at ₹ 327,354 crore as at March 31, 2021, registering a robust growth of 8% over March 31, 2020. International orders constitute 21% of the total order book.
Infrastructure Segment
During the quarter January-March 2021, the Infrastructure Segment recorded order inflow of ₹ 31,256 crore, registering a decline of 24% over the corresponding quarter of the previous year, which witnessed receipt of some large value orders in the Health and Urban Water Management segments. International orders at ₹ 10,673 crore constituted 34% of the total order inflow of the segment during the quarter.
The Segment secured the highest ever order inflow of ₹ 102,702 crore, during the year ended March 31, 2021, registering a growth of 4% compared to previous year. During the year, two marquee orders of High-Speed Rail (including the largest ever EPC order in history of India), order for longest river bridge and order for the biggest Solar PV plant were received. International orders at ₹ 19,641 crore constituted 19% of the total order inflow of the segment during the year.
The segment order book stood at ₹ 244,565 crore as at March 31, 2021, a growth of 13% with receipt of prestigious large value orders. The share of international orders in the order book is at 20%.
The segment recorded customer revenues of ₹ 26,240 crore for the quarter January-March 2021, registering y-o-y growth of 5% with pick up of execution 3 momentum in projects. International revenues constituted 26% of the total customer revenues of the segment during the quarter.
For the year ended March 31, 2021, the customer revenue at ₹ 61,431 crore registered a y-o-y decline of 15%, largely due to the Covid-19 led lockdowns and subsequent adherence to Covid-19 protocols impacting site execution productivity. International revenue constituted 26% of the total customer revenue of the segment during the year.
The EBITDA margin of the segment during the year ended March 31, 2021 was at 8.5% vis-à-vis 8.2% recorded in previous year. Claim settlements in few domestic projects, reduced Expected Credit Loss provisions with realisation of collections and tapering of stressed projects contributed to the margin improvement.
Effective April 1, 2020, the Smart World and Communication business which was reported under Infrastructure Segment has been reclassified to “Others Segment” and accordingly, previous year figures have been regrouped wherever necessary.
Power Segment
The Power segment recorded order inflow of ₹ 792 crore for the quarter January-March 2021, on receipt of an order for Flue Gas Desulphurisation (FGD).
For the year ended March 31, 2021, the segment secured orders of ₹ 982 crore registering decline of 92% compared to previous year, reflecting the low tendering activity in the sector. International orders constituted 5% of the total order inflow of the segment during the year.
The order book of the segment stood at ₹ 12,844 crore as at March 31, 2021, a de-growth of 19%, affected due to low order inflows. The international order book constitutes 6% of the total order book.
The segment recorded customer revenues of ₹ 1,216 crore for the quarter January-March 2021, recording substantial growth of 119% over corresponding quarter of the previous year on the order book gaining execution momentum. International revenues constituted 1% of the total customer revenues of the segment during the quarter.
For the year ended March 31, 2021, the customer revenues at ₹ 3,174 crore, registered a y-o-y growth of 38%. International revenues constituted 5% of the total customer revenues of the segment during the year.
The segment EBITDA margin for the year ended March 31, 2021 was at 4.6%, lower as compared to 12.0% of the previous year, that had a favourable customer claim settlement.
Heavy Engineering Segment
For the quarter January-March 2021, the Heavy Engineering segment recorded order inflow of ₹ 1,778 crore recording a y-o-y growth of 79% with receipt of a large order in Nuclear power business. International orders constituted 7% of the total order inflow of the segment during the quarter.
The segment secured orders valued at ₹ 3,574 crore during the year ended March 31, 2021 registering growth of 51% y-o-y. International orders constituted 35% of the total order inflow of the segment during the year.
The order book of the segment at ₹ 4,372 crore as at March 31, 2021, registered a growth of 6%, with export orders constituting 31%.
The segment recorded customer revenues of ₹ 999 crore during the quarter January-March 2021, recording a y-o-y growth of 57% across all businesses on better execution of projects. International sales constituted 48% of the total customer revenues of the segment during the quarter.
For the year ended March 31, 2021, customer revenues at ₹ 2,712 crore, registered a y-o-y decline of 5%. International sales constituted 55% of the total customer revenue of the segment.
The EBITDA margin of the segment at 19.7% for the year ended March 31, 2021 registered decline over 21.5% in the previous year, due to settlement reached with an international client relating to warranty.
Defence Engineering Segment
During the quarter January-March 2021, Defence Engineering Segment recorded order inflow of ₹ 282 crore registering a decline of 73% over the previous year, which included a large value order received in the Weapons & Engineering Systems business.
The Segment secured orders valued at ₹ 2,468 crore during the year ended March 31, 2021, representing a growth of 22% over the previous year.
The order book of the segment stood at ₹ 7,889 crore as at March 31, 2021, a decline of 12%, with completion of deliveries of the prestigious K9 Vajra Howitzer. The export orders constitute 11%.
The segment recorded customer revenues of ₹ 1,136 crore during the quarter January-March 2021 recording a y-o-y growth of 43% on strong execution of projects 5 in Weapons & Engineering System business. International revenues constituted 19% of the total customer revenues of the segment during the quarter.
For the year ended March 31, 2021, the customer revenues at ₹ 3,396 crore registered a y-o-y decline of 8% over the previous year. International revenues constituted 24% of the total customer revenue of the segment.
For the year ended March 31, 2021, the customer revenues at ₹ 3,396 crore registered a y-o-y decline of 8% over the previous year. International revenues constituted 24% of the total customer revenue of the segment.
The Military Communication Business of Defence Engineering Segment has been transferred with effect from April 1, 2020 to Smart World and Communication business and reclassified to “Others Segment”. Accordingly, previous year figures are regrouped wherever necessary.
Hydrocarbon Segment
The order inflow of Hydrocarbon segment for the quarter January-March 2021 stood at ₹ 3,591 crore recording a y-o-y growth of 43%. International order inflow constituted 35% of the total order inflow of the segment during the quarter.
The Hydrocarbon Segment secured orders valued at ₹ 17,729 crore during the year ended March 31, 2021, a decline of 15% compared to previous year, attributed to drop in order prospects in the Middle East. International order inflow constituted 17% of the total order inflow of the segment.
The segment order book at ₹ 44,179 crore as at March 31, 2021, is almost on par with the previous year, with the international order book constituting 36%.
The segment recorded customer revenues of ₹ 5,412 crore during the quarter January-March 2021, recording a y-o-y growth of 9% with peaking of execution activities in the onshore vertical segment. International revenues constituted 38% of the total customer revenue of the segment for the quarter.
For the year ended March 31, 2021, the customer revenues at ₹ 16,925 crore registered y-o-y decline of 3%. International revenue constituted 47% of the total customer revenue of the segment for the year ended March 31, 2021.
The EBITDA margin of the segment at 10.3% for the year ended March 31, 2021 registered decline over the 10.9% of the previous year, reflecting impact of under recoveries during the lockdown period.
IT & Technology Services (IT&TS) Segment
The segment comprises (a) L&T Infotech (b) L&T Technology Services and (c) Mindtree. As Mindtree is consolidated from second quarter of FY 2019-20, the resultant figures for the current financial year is not comparable with the previous period on a like-to-like basis.
The segment recorded customer revenues of ₹ 6,763 crore during the quarter January-March 2021, recording a q-o-q growth of 4% & y-o-y growth of 7% led by L&T Infotech. Export billing constituted 93% of the total customer revenues of the segment for the quarter.
For the year ended March 31, 2021, the customer revenues at ₹ 25,463 crore registered a y-o-y growth of 15%. Export sales constituted 93% of the total customer revenues of the segment for the year ended March 31, 2021.
The EBITDA margin for the segment increased to 23.5% for the year ended March 31, 2021 as compared to 20.9% in the previous year, attributed to improved manpower utilisation and operational efficiencies.
Financial Services Segment
Financial Services segment recorded income from operations at ₹ 3,377 crore during the quarter January-March 2021, almost at the same level when compared to the similar quarter in the previous year.
The segment recorded income from operations at ₹ 13,404 crore during the year ended March 31, 2021, registering a y-o-y decline of 3%.
The Loan Book decreased to ₹ 94,013 crore as compared with March’20 level at ₹ 98,384 crore, reflecting focus on collections, sell down and run down of defocussed business portfolio.
The operating margin of the segment for the year ended March 31, 2021 was lower at 10.2% as compared to the previous year at 19.9% due to higher credit provisions reflecting the effect of the pandemic and the repayment moratorium extended by the Reserve Bank of India.
Developmental Projects Segment
The segment recorded customer revenues of ₹ 1,114 crore during the quarter January-March 2021 recording a y-o-y growth of 13%, mainly due to Rajpura power plant, which was partially shut down (unit 1) for capital overhaul during the corresponding quarter of the previous year.
For the year ended March 31, 2021, the customer revenues at ₹ 3,621 crore registered a decline of 25% over the previous year, due to suspension of metro services in Hyderabad consequent to the lockdown and thereafter lower ridership and lower PLF in Rajpura power plant on lower off take of power by PSPCL and the rail roko agitation by farmers in the state of Punjab during Q3 FY 2020-21.
For the year ended March 31, 2021, the customer revenues at ₹ 3,621 crore registered a decline of 25% over the previous year, due to suspension of metro services in Hyderabad consequent to the lockdown and thereafter lower ridership and lower PLF in Rajpura power plant on lower off take of power by PSPCL and the rail roko agitation by farmers in the state of Punjab during Q3 FY 2020-21.
“Others” Segment
“Others” segment comprises (a) Realty, (b) Construction & Mining Machinery, (c) Rubber Processing Machinery, (d) Industrial Valves and (e) Smart World and Communication.
The customer revenues of this segment during the quarter January-March 2021 at ₹ 1,830 crore, recorded a y-o-y growth of 22% with strong execution of opening order book in Smart World & Communication, higher demand in Construction Equipment business and higher fulfilment of customer despatches in the Industrial Valves business. Export sales constituted 8% of the total customer revenues of the segment during the quarter, majorly pertaining to the Industrial Valves business.
Customer revenues during the year ended March 31, 2021 at ₹ 5,853 crore registered a decline of 9% over the previous year, since previous year had a higher handover of residential properties in the Realty business. Export sales constituted 11% of the total customer revenues of the segment during the year.
During the year ended March 31, 2021, the segment EBITDA margin at 21.0%, is higher compared to 17.6% in the previous year on gain on sale of a commercial property in the Realty business.
Outlook
During the year FY 2020-21, India despite stiff lockdowns, reverse labour migration, supply chain disruptions, a resultant deep GDP contraction, still did well to recover to the path of economic recuperation and full recovery. Large constituents of the economy recovered to the pre Covid-19 level of activity in a phased manner. The economy which made a resilient comeback during the later part of FY 2020-21, is once again at the crossroads, with the onset of a more ferocious second wave of the Covid-19 pandemic, impacting many states. This is expected to temporarily slow down the growth momentum, especially during the first quarter of FY 2021-22. Once the immediate challenges of shortages in health infrastructure and availability of vaccines get resolved, it is expected that with a controlled implementation of specific lockdowns in localized containment zones and strict adherence to Covid-19 8 protocols, the economy would once again recover back with the resumption of near normalized activity in sectors like agriculture, manufacturing, mining, construction and non-contact based services.
The investment focussed Union Budget 2021 and the growth supportive measures taken by the Government viz. increased allocations for capital expenditure under the NIP, the expanded production-linked incentives (PLI) scheme, FDI policy, and the ease of doing business will only reinforce the process of economic revival. The support by a credit expansive interest regime will provide further fillip to the investment climate.
Elsewhere, most parts of the global economy is gradually recovering from the impact of the Covid-19 pandemic, but it still continues to remain uneven across countries with economic activity in many countries still below pre-Covid-19 levels. On the positive side, large scale vaccination drives, sustained accommodative monetary policies, government stimulus packages to citizens and small businesses support a vastly improved global economic outlook for 2021. The hardening of energy and metal prices only confirms this view.
In the backdrop of the Covid-19 pandemic and the resultant challenging economic environment, the Company while upholding the primary dictum of maintaining the health and safety of its personnel will continue to aggressively pursue opportunities for growth, both in domestic and international markets. The focus would be on large project wins, efficient execution of its large order book, productive utilization of its monetary resources, all targeted to ensure a sustainable business model and thereby improved shareholder return.
Press Release and CFS Financial Results Q4 2020-21-13089
Background:
Larsen & Toubro is an Indian multinational engaged in EPC Projects, Hi-Tech Manufacturing and Services. It operates in over 30 countries worldwide. A strong, customer–focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for eight decades.