L&T Q4FY2012 results were above our expectation mainly led by good operating performance and lower tax, while topline was in line with expectation. The strong revenue growth was backed by strong execution in E&C segment. However order inflow has been muted in FY2012.
Topline growth at 22% year on year ( YoY) - Led by good execution in E&C segment (segment revenue up 22% YoY). E&E division also reported a robust 14% growth in revenue. However, MIP division performance was disappointing with yearly fall of 8% in revenue.
Overall margin above expectation, however segmental margins under pressure - The overall operating margins stood at 13.9% higher than our expectation of 13.2% and 13.5% reported in Q4FY2011. However, the segmental margins were under pressure while unallocable expenditure has fallen by 87%. Other income surprisingly fell by 53% YoY, so has the depreciation by 24% net interest charges remained subdued. Lower tax rate boosted the adjusted PAT YoY growth to 32%, higher than our expectation of 10.2% growth.
Order inflow subdued at Rs21159 crore- Order inflow has been modest at Rs21159 crore (fall of 30% YoY). Overall FY12 order inflow fell by 12% YoY much lower than 5% growth guidance given at the start of the year. Current order book stands at Rs145723 crore (up 12% YoY and flattish QoQ).
We would come out with a detailed note post the interaction with the management
L&T (Rs1588, Buy) Q4FY2012 strong revenue growth at 21% YoY was backed by strong execution in E&C and E&E segment (growing 23% and 14% YoY respectively). Overall margins came above expectation at 13.9%, while segmental margins were under pressure. The order inflow for Q4 was disappointing, registering a year-on-year (Y-o-Y) decline of 30% to Rs21,159 crore, falling behind market expectations. The company has surprised positively with its order inflow guidance for FY2013. It expects a 15-20% growth in fresh order inflow revenue for FY2013. At the current level the stock is trading at 12.5x its FY2013E");'> FY2013E earnings.
We maintain our Buy recommendation on the stock with a target price of Rs1588.
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Topline growth at 22% year on year ( YoY) - Led by good execution in E&C segment (segment revenue up 22% YoY). E&E division also reported a robust 14% growth in revenue. However, MIP division performance was disappointing with yearly fall of 8% in revenue.
Overall margin above expectation, however segmental margins under pressure - The overall operating margins stood at 13.9% higher than our expectation of 13.2% and 13.5% reported in Q4FY2011. However, the segmental margins were under pressure while unallocable expenditure has fallen by 87%. Other income surprisingly fell by 53% YoY, so has the depreciation by 24% net interest charges remained subdued. Lower tax rate boosted the adjusted PAT YoY growth to 32%, higher than our expectation of 10.2% growth.
Order inflow subdued at Rs21159 crore- Order inflow has been modest at Rs21159 crore (fall of 30% YoY). Overall FY12 order inflow fell by 12% YoY much lower than 5% growth guidance given at the start of the year. Current order book stands at Rs145723 crore (up 12% YoY and flattish QoQ).
We would come out with a detailed note post the interaction with the management
L&T (Rs1588, Buy) Q4FY2012 strong revenue growth at 21% YoY was backed by strong execution in E&C and E&E segment (growing 23% and 14% YoY respectively). Overall margins came above expectation at 13.9%, while segmental margins were under pressure. The order inflow for Q4 was disappointing, registering a year-on-year (Y-o-Y) decline of 30% to Rs21,159 crore, falling behind market expectations. The company has surprised positively with its order inflow guidance for FY2013. It expects a 15-20% growth in fresh order inflow revenue for FY2013. At the current level the stock is trading at 12.5x its FY2013E");'> FY2013E earnings.
We maintain our Buy recommendation on the stock with a target price of Rs1588.
| Rs crore | Q4FY11 | Q4FY12 | Growth | Q4FY12E | Variance |
| Net Sales | 15,078 | 18,461 | 22% | 18,015.4 | 2% |
| Total Expenditure | 13,043 | 15,900 | 22% | 15,633.7 | 2% |
| Operating profits | 2,035 | 2,561 | 26% | 2,381.7 | 8% |
| Other Income | 676 | 314 | -53% | 716.8 | -56% |
| PBIDT | 2,711 | 2,875 | 6% | 3,098.5 | -7% |
| Interest | 136 | 121 | -11% | 255.4 | -53% |
| PBDT | 2,575 | 2,754 | 7% | 2,843.1 | -3% |
| Depreciation | 236 | 180 | -24% | 250.0 | -28% |
| PBT | 2,339 | 2,574 | 10% | 2,593.1 | -1% |
| Tax | 879 | 708 | -19% | 985.4 | -28% |
| Adjusted PAT | 1,459 | 1,865 | 28% | 1,607.7 | 16% |
| Extra-ordinary Items | 227 | 55 | |||
| Reported PAT | 1,686 | 1,920 | |||
| Margins | Q4FY11 | Q4FY12 | Q4FY12E | ||
| OPM(%) | 13.5 | 13.9 | 13.2 | ||
| PATM(%) | 9.7 | 10.1 | 8.9 | ||
| Tax rate (%) | 37.6 | 27.5 | 38 |
| Segmental results | Q4FY11 | Q4FY12 | Growth |
| Revenue | 15,762.3 | 18,943.7 | 20% |
| E&C | 13,664.30 | 16,708.50 | 22% |
| E&E | 1,001.40 | 1,143.50 | 14% |
| MIP | 886.1 | 816.9 | -8% |
| Others | 210.5 | 274.9 | 31% |
| Financail services | |||
| Developmental projects | |||
| Total | 15,762.30 | 18,943.70 | 20% |
| Less : Inter Segment Revenues | 138.2 | 298 | |
| PBIT | 2,352.00 | 2,590.50 | 10% |
| E&C | 1,980.70 | 2,265.20 | 14% |
| E&E | 152.1 | 159.4 | 5% |
| MIP | 173.3 | 133.3 | -23% |
| Others | 45.9 | 32.5 | -29% |
| PBIT Margins | |||
| E&C | 14.5 | 13.6 | |
| E&E | 15.2 | 13.9 | |
| MIP | 19.6 | 16.3 | |
| Others | 21.8 | 11.8 |
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