LARSEN & TOUBRO Analyst Presentation Q1 FY21 July 22, 2020 1 1
Disclaimer This presentation contains certain forward retain highly skilled professionals, time and cost looking statements concerning L&T’s future over runs on contracts, our ability to manage our business prospects and business profitability, international operations, government policies which are subject to a number of risks and and actions with respect to investments, fiscal uncertainties and the actual results could deficits, regulations, etc., interest and other materially differ from those in such forward fiscal costs generally prevailing in the economy. looking statements. Past performance may not be indicative of future performance. The risks and uncertainties relating to these statements include, but are not limited to, risks The company does not undertake to make any and uncertainties regarding fluctuations in announcement in case any of these forward earnings, our ability to manage growth, looking statements become materially incorrect competition (both domestic and international), in future or update any forward looking economic growth in India and the target statements made from time to time by or on countries for exports, ability to attract and behalf of the company. Engineering Manufacturing Construction Projects Technology Financial Services 2
Group Performance Highlights 01 Engineering Manufacturing Construction Projects Technology Financial Services 3
Q1 FY21: An Unprecedented Quarter Order wins amidst the pandemic Order Book stable Revenues reflect lockdown conditions Consequences of negative operating leverage Strong Cashflow Management Ample systemic liquidity Engineering Manufacturing Construction Projects Technology Financial Services 4
Key Financial Indicators (Amount in ₹ bn) Q1 FY20 Particulars Q1 FY21 % Var 387 Order Inflow 236 -39% 2940 Order Book 3051 4% 296 Revenue 213 -28% 31 EBITDA 16 -47% 15 PAT 3 -79% 23.9% Net Working Capital 26.8% 15.4% RONW (TTM) (%) 12.7% - Engineering Manufacturing Construction Projects Technology Financial Services 5
02 Group Performance Summary Engineering Manufacturing Construction Projects Technology Financial Services 6
Q1 FY21 Order Inflow/Order Book (Amount in ₹ bn) Order Inflow Order Book 4 % 39% Q1 FY21 624 745 147 89 236 2940 3051 Q1 FY20 2316 2306 387 297 90 Q1 FY20 Q1 FY21 Domestic International • Ordering activity has continued despite pandemic concerns, though with time delays • Priority for Infra: Sectors like Water, Heavy Civil and Power T&D • Encouraging prospect pipeline • Portfolio diversity and dependence on Public capex and PSU investments mitigates cyclicality Engineering Manufacturing Construction Projects Technology Financial Services 7
Group Performance – Sales & Costs • Pandemic shadows Q1 revenues across verticals. IT&TS businesses smoothly transition to WFH model Rs Billion Q1 FY20 Q1 FY21 % Var • MCO expense variation largely due to higher proportion of IT&TS Revenue 296.4 212.6 -28% business and cost control initiatives International Rev. 31% 45% • Fin charge Opex largely represents borrowing costs of FS MCO Exp. 179.4 92.3 -49% business • Staff cost increase on Mindtree Fin. Charge Opex* 20.8 21.0 1% consolidation and resource augmentation in Service Staff Costs 45.5 61.5 35% businesses Sales & Admin. 20.0 21.5 8% • Higher SG&A charge mainly on credit provisions in Fin. Serv business & Mindtree Total Opex 265.7 196.4 -26% consolidation; partly mitigated by overhead expense savings * Finance cost of financial services business and finance lease activity Engineering Manufacturing Construction Projects Technology Financial Services 8
Group Performance – Profit Parameters • Finance cost commensurate with Rs Billion Q1 FY20 Q1 FY21 % Var increased borrowings and full commissioning of Hyd. Metro EBITDA 30.7 16.2 -47% • Higher depreciation charge mainly Fin. Cost (5.9) (10.6) 80% on account of Mindtree consolidation Depreciation (4.6) (6.7) 46% • Other income reflective of treasury investment and higher yield Other Income 6.3 7.8 22% • Share of JV/Associate PAT largely Tax Expense (7.9) (2.1) -74% comprises results of IDPL, Power Eqpt. and Forgings JVs JV/Associate PAT Share (1.6) (1.0) -38% • NCI variation largely due to lower Non-controlling Int. (3.4) (1.8) -48% Fin. Serv. profits partly offset by Mindtree consolidation Discontinued Operations 1.1 0.1 • E&A business classified as discontinued operations Recurring PAT 14.7 1.9 -87% • Exceptional item represents gains Exceptionals - 1.1 on divestment of wealth management business Reported PAT 14.7 3.0 -79% Engineering Manufacturing Construction Projects Technology Financial Services 9
Segment / Key Subsidiaries 03 Engineering Manufacturing Construction Projects Technology Financial Services 10
Segment Composition Heavy Defence Hydrocarbon Infrastructure Power Engineering Engineering Defence Onshore Buildings & Factories (B&F) EPC- Coal & Gas Process Plant Equipment Aerospace Thermal Power Plant Nuclear Power Plant Offshore Transportation Infra (TI) Shipbuilding Construction Equipment Heavy Civil infra (HC) Electrostatic Piping Centre & Forgings * Water & Effluent Treatment (WET) Precipitator Power T&D (PT&D) Power Equipment Metall. & Mat. Handling (MMH) Mfg. * Electrical & Developmental Others Financial IT & TS Automation Projects Services Realty Electrical Standard Rural Lending Information Technology Roads / Trans. Line * Products Industrial Products & Technology Services Housing Finance Metros Machinery Electrical Systems Wholesale Finance Power Smart World & & Equipment Asset Management Comm.(SW&C) Metering & Protection Control & Automation * Consolidated at PAT level E&A Segment is classified a discontinued operations and consolidated at PAT level Engineering Manufacturing Construction Projects Technology Financial Services 11
Q1 FY21 Order Inflow Composition ROW Others 3% 2% USA & Europe 23% Infrastructure 48% Services 42% Middle East Defence 12% Domestic Engineering 62% 1% Hydrocarbon Power HE 5% 0.2% 2% Order Inflow Rs 236 Bn Engineering Manufacturing Construction Projects Technology Financial Services 12
Q1 FY21 Order Book Composition ROW USA & Others 9% Hydrocarbon Europe 5% 14% 1% Defence Engineering 3% Middle East HE 14% 1% Power 5% Domestic Infrastructure 76% 72% Order Book Rs 3051 Bn Engineering Manufacturing Construction Projects Technology Financial Services 13
Q1 FY21 Revenue Composition ROW Others 7% 3% Infrastructure 30% USA & Europe 26% Services Power 47% 2% HE 2% Domestic Defence Middle 55% Engineering East 2% 12% Hydrocarbon 14% Revenue Rs 213 Bn Engineering Manufacturing Construction Projects Technology Financial Services 14
Infrastructure Segment (Amount in ₹ bn) 53 % Net Revenue Q1 FY20 Q1 FY21 6.4% EBITDA Margin 6.3% Domestic International Early signs of ordering activity pick-up (both domestic and international) • Execution hindered by lockdown across all verticals; graded resumption with limited workforce • and disrupted supply chain Stable margins attributable to favourable input cost and expense control • Engineering Manufacturing Construction Projects Technology Financial Services 15
Power Segment (Amount in ₹ bn) 33 % Net Revenue Q1 FY20 Q1 FY21 3.3% EBITDA Margin 1.0% Domestic International No prospects targeted for award in Q1 • Revenue decline reflects gradual resumption of operations during the quarter • High value orders won last year yet to cross margin recognition threshold • Profits of MHPS and other JV companies are consolidated at PAT level under equity method • Engineering Manufacturing Construction Projects Technology Financial Services 16
Heavy Engineering Segment (Amount in ₹ bn) 57 % Net Revenue Q1 FY20 Q1 FY21 19.5% EBITDA Margin 17.5% Domestic International • Order wins (including international) despite global pandemic • Phased ramp up constricts revenues for the quarter. • Margin variation on low capacity utilisation and under recoveries Engineering Manufacturing Construction Projects Technology Financial Services 17
Defence Engineering Segment (Amount in ₹ bn) 49 % Net Revenue Q1 FY20 Q1 FY21 16.6% EBITDA Margin 12.9% Domestic International Ordering from MoD getting deferred due to pandemic • Supply chain constraints hamper execution during Q1 • Margins affected by job mix and under-recoveries • Engineering Manufacturing Construction Projects Technology Financial Services 18
Hydrocarbon Segment (Amount in ₹ bn) 19 % Net Revenue Q1 FY20 Q1 FY21 7.6% EBITDA Margin 5.3% Domestic International Slowdown in order inflows due to depressed oil prices • Revenue growth impacted by low utilisation at yards and constraints on execution at • job sites Cost provisions and under-recovery of overheads in a restricted execution environment • Engineering Manufacturing Construction Projects Technology Financial Services 19
Recommend
More recommend
