homeearnings NewsHere's why L&T is treating FY24 as a 9 10 month year and how it will outperform its guidance
Here's why L&T is treating FY24 as a 9-10 month year and how it will outperform its guidance
For the September quarter, Larsen & Toubro's order inflow grew by 72% from last year to ₹89,153 crore.
India's largest infrastructure and construction company Larsen & Toubro Ltd. is treating financial year 2024 as a year with only nine to ten months instead of the full 12. This is because of the upcoming general elections in 2024, where government capex may come to a halt due to the implementation of the Model Code of Conduct.
In an exclusive interaction post its September quarter results, L&T's CFO and Executive Director R Shankar Raman said that the company is confident of surpassing both its revenue growth and order inflow guidance for the year, as the management highlighted in its post-earnings call on Tuesday.
"We had approached this year as a nine-month year or a 10-month year, we were never looking at this year as a 12-month year because of this disruption that was likely to come up. We don't know the dates yet. So I am not in a position to put a percentage point number to say that it will be 15% or 18% or 20%," he said.
For the September quarter, Larsen & Toubro's order inflow grew by 72% from last year to ₹89,153 crore. The company had won total orders worth ₹2.3 lakh crore in financaial year 2023. A 10% to 12% growth from that level would mean a total number of ₹2.55 lakh crore to ₹2.6 lakh crore. Out of this, the company would see services orders worth ₹60,000 crore on a consolidated basis.
"Now, we do think that looking at the prospect pipeline that is ahead of us and we think is about ₹8 lakh crore - ₹8.5 lakh crore worth of prospects that we have ahead of us, we think that we will outperform the order inflow guidance quite handsomely," L&T's CFO said, implying that winning even 20% of the projects that they plan on bidding for would mean that they would surpass their guidance for the year.
Additionally, the infrastructure conglomerate also announced a foray into fabless semiconductor chip design through a subsidiary. L&T will be making an investment of up to ₹830 crore for the same.
L&T's CFO mentioned that semiconductor manufacturing is one area where India has "enormous potential." He further added that the company's subsidiary, L&T Technology Services (LTTS) is working with customers for the chip design.
Here are some other key takeaways from that interaction:
- Trying our best to reach the 9% margin guidance in the second half of the year
- Confident of EPC track record of building Hydrogen manufacturing plants
- Targeting Hyderabad Metro disinvestment by financial year 2027-2028
(Edited by : Hormaz Fatakia)
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