L&T Shares Gain Close To 3% Post Decent Results; ICICI Direct Says It To Be A Good Bet

L&T shares in trade on July 27, 2022 have gained close to 3% to day's high price of Rs. 1803 per share on the NSE. On the previous day, the scrip closed at Rs. 1751.25 apiece.

The gains are mainly led by the company's good results. "L&T's adj. standalone revenues (Ex- E&A) for the quarter grew by 21.7% YoY to Rs. 20211.7 crore (vs. our estimate of Rs. 20586.7 crore). On a consolidated basis, adj. revenues grew by 22% to Rs. 35853 crore YoY basis with strong execution witnessed in the Infrastructure segment and riding on the sustaining growth momentum in the IT&TS
portfolio. For Q1FY23, L&T registered strong order inflows at group level worth Rs. 41805 crore, which grew by 57% YoY. International
orders for Q1FY23 came in at Rs. 17842 crore contributing 43% to order inflows. L&T's order backlog as on Q1FY23 stood at Rs.
363448 crore with international orders contributing 28%. During the quarter, Standalone EBITDA margins declined by 68bps to 7.6% (Vs. our estimates of 7.7%) on YoY basis owing to job mix and cost control initiatives. On a consolidated basis, EBITDA
margins came in at 11%. Consequently, for Q1FY23, standalone Adj. PAT (Ex-E&A) came in at Rs. 911.2 crore, de-grew by 9.7% on YoY (Vs. our estimates of Rs. 1392.9 crore) due to lower other income. Other income came in at Rs. 567.9 crore de-grew by 19.5% on YoY while, interest expense increased by 6.3% to Rs. 504.5 crore. The consolidated adj. PAT for Q1FY23 came in at Rs. 1702.07 crore (Vs Rs. 1174.4 crore in Q1FY22).

The results are seen to be positive for the infra major. Further, ICICI Direct is of the view that "L&T reported strong execution with
equally strong order inflows for the quarter. L&T is well on track to achieve its guidance of 12-15% revenues and order
inflow growth for FY23E. The margins guidance has been pegged at 9.5% given the volatile commodity outlook. Focus on
monetisation of non-core assets, enhancing ROE's and reducing debt makes it an attractive portfolio bet to ride the infrastructure and manufacturing cycle revival theme".