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NEW DELHI: Larsen & Toubro (L&T) is likely to report up to 37 per cent year-on-year (YoY) rise in profit for the March quarter on a double-digit rise in sales. Margin for the quarter is seen falling on a YoY basis. Analysts said the order flows for L&T could be weak, but execution for the quarter is likely to stay strong.

Guidance on order inflows and margins, especially the impact of high input costs, for FY23 would be closely monitored, they said.

sees revenues rising 13.2 per cent to Rs 54,438 crore from Rs 48,088 crore YoY. It sees profit rising 25.8 per cent to Rs 4,299 crore from Rs 3,417.30 crore. Margin is seen at 12.9 per cent from 13.3 per cent in the year-ago quarter, the brokerage said.

Sharekhan expects the company to report order inflows of Rs 70,000-80,000 crore, building on the low to mid-teen digit order inflow growth guidance given by the company.

It sees sales for the quarter rising 12.4 per cent YoY to Rs 54,065 crore driven by growth in core E&C business, thanks to higher execution and billing in a seasonally strong quarter. It sees profit rising 9.8 per cent YoY to Rs 3,753 crore.

“We build in a decline in OPM YoY due to increase in input cost particularly for fixed priced contracts. However, margins could improve QoQ on account of operating leverage due to higher revenue and cost-saving initiatives,” Sharekhan said.

Centrum said that led by weak order announcements of Rs 17,500 crore in Q4, it is expecting E&C order inflows to grow 5.4 per cent YoY to Rs 41,700 crore, assuming Rs 8,000 crore more announcements pertaining to the quarter.

“Our estimates imply E&C order inflow of Rs 1.25 lakh crore in FY22 (5.9 per cent YoY decline vis-à-vis guidance of 10-12 per cent growth). Consolidated inflows are likely to decline 6.6 per cent YoY to Rs 54,000 crore in Q4,” it said.

With better man, material and money at sites, Edelweiss expects execution & P&L recognition for L&T to improve going ahead.

“New orders led by domestic pipeline and working capital improvement remain key triggers. Lastly, capital allocation, metro & power asset divestments remain near-mid term triggers,” it said.


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