Introduction
Larsen & Toubro (L&T), India’s premier multinational engineering, construction, and technology conglomerate, announced its audited financial results for the quarter and fiscal year ended March 31, 2025, during a board meeting held on May 8, 2025. The results underscore robust growth across key metrics, including order inflow, revenue, and profitability, alongside strategic initiatives aimed at future-proofing the company. This article delves into the financial highlights, leadership changes, segmental performance, and market implications, offering insights into L&T’s stock trajectory and investor sentiment.
Key Financial Highlights: FY2025 at a Glance
- Order Inflow:
- FY2025: ₹356,631 crore (18% YoY growth).
- Q4 FY2025: ₹89,613 crore (24% YoY growth).
- International orders constituted 58% of annual inflows, driven by projects in renewable energy, hydrocarbons, and infrastructure.
- Revenue:
- Consolidated revenue crossed ₹255,734 crore (16% YoY growth).
- International revenue contributed 50%, reflecting strong execution in global markets.
- Profitability:
- Consolidated PAT: ₹15,037 crore (15% YoY growth), including an exceptional gain of ₹475 crore from partial reversal of impairment provisions.
- EBITDA Margin: 10.3% (vs. 10.6% in FY2024), impacted by early-stage execution costs in new hydrocarbon projects.
- Dividend:
- Final dividend of ₹34 per share (face value ₹2), up 21% from ₹28 in FY2024.
- Record date: June 3, 2025; AGM approval pending on June 17, 2025.
Stock Price Analysis: Bullish Signals and Market Reaction
As of May 8, 2025, L&T’s stock (BSE: 500510, NSE: LT) closed at ₹4,850, reflecting a 3.2% intraday gain post-results. Analysts attribute the surge to:
- Dividend Boost: The 21% hike signals confidence in liquidity and shareholder returns.
- Order Book Strength: A record ₹579,137 crore order book (22% YoY growth) provides revenue visibility for the next 2–3 years.
- Margin Resilience: Despite inflationary pressures, infrastructure and hi-tech manufacturing segments improved margins.
Technical Outlook:
- Support Level: ₹4,600 (100-day moving average).
- Resistance Level: ₹5,000 (psychological barrier).
- Institutional Activity: Foreign Portfolio Investors (FPIs) increased holdings by 1.2% QoQ, anticipating infrastructure-led growth in India’s capex cycle.
Segmental Breakdown: Driving Growth Across Verticals
- Infrastructure Projects (45% of Revenue):
- Order Inflow: ₹173,226 crore (21% YoY).
- Revenue: ₹129,897 crore (15% YoY).
- Key Wins: Renewable energy vertical carved out from power transmission; major contracts in Middle East airports and metros.
- Energy Projects (16% of Revenue):
- Order Inflow: ₹87,569 crore (19% YoY), including a mega Qatar Energy contract.
- Revenue: ₹40,668 crore (38% YoY).
- Strategic Shift: Hydrocarbon business split into offshore and onshore verticals; Gujarat green hydrogen plant underway.
- Hi-Tech Manufacturing (4% of Revenue):
- Order Inflow: ₹18,282 crore (28% YoY).
- Revenue: ₹9,695 crore (18% YoY).
- Milestones: Acquisition of L&T Special Steels; launch of multi-purpose vessels and electrolyser tech.
- IT & Technology Services (19% of Revenue):
- Revenue: ₹47,845 crore (8% YoY).
- Acquisitions: 15% stake in E2E Networks; full ownership of SiliConch Systems.
- Financial Services (6% of Revenue):
- Loan Book: ₹97,762 crore (14% YoY).
- Expansion: Entry into gold loans via Paul Merchants Finance acquisition.
Leadership Transition and Governance Updates
- Retirement: Mr. Sivaram Nair A, Company Secretary & Compliance Officer, retired on May 9, 2025, after decades of service.
- Appointment: Mr. Subramanian Narayan, a 25-year veteran in corporate governance, assumed the role on May 10, 2025. His profile highlights expertise in mergers, compliance, and stakeholder management.
- Auditors: M/s. S. N. Ananthasubramanian & Co. appointed as Secretarial Auditors for five years, reinforcing governance standards.
Strategic Outlook: Navigating Global Headwinds
Management Commentary:
Chairman S.N. Subrahmanyan emphasized L&T’s “cautious optimism” amid geopolitical volatility. Key focus areas include:
- New-Age Businesses: Semiconductor technologies and data centers.
- Energy Transition: Green hydrogen, carbon capture, and renewable EPC.
- Digitalization: AI-driven solutions in construction and project management.
Economic Projections:
- India’s GDP growth: 6.25–6.50% for FY2025.
- Risks: Rising cross-border tariffs, crude oil volatility, and supply chain disruptions.
Auditors’ Assurance and Compliance
- Audit Firms: Deloitte Haskins & Sells LLP and M S K A & Associates issued unmodified opinions, validating financial integrity.
- Key Metrics: Debt-equity ratio stable at 1.12; interest coverage ratio improved to 6.75.
Investor Takeaways and Stock Valuation
- Dividend Yield: 0.7% (₹34 dividend ÷ ₹4,850 stock price), attractive for income-focused portfolios.
- Valuation:
- P/E Ratio: 28x (vs. 5-year average of 25x), reflecting premium for growth visibility.
- Price/Book: 4.1x, aligned with capital-intensive peers.
- Risks: Margin compression in energy projects; slower-than-expected private capex revival.
Conclusion: L&T’s Path to a $30 Billion Vision
L&T’s FY2025 performance cements its position as a bellwether of India’s infrastructure and technology sectors. With a robust order pipeline, strategic diversification, and disciplined capital allocation, the company is poised to capitalize on global energy transitions and digital transformation. While macroeconomic uncertainties persist, L&T’s risk-mitigation strategies and innovation focus make it a compelling long-term bet.
Investors should monitor execution efficiency in international projects and margin trends in Q1 FY2026. For now, the stock’s upward momentum appears justified, supported by fundamentals and sector tailwinds.
DISCLAIMER
______________
“BrightStake” is only an Educational Platform and is not registered under any SEBI Regulations. All Information on this page is for Educational and Entertainment purposes only. Our content does not constitute any Trading or Investment advice. We make no representation of the Timeliness, Accuracy, Profitability, or Suitability of any share on this Website, and we cannot be held liable for any Irregularity or Inaccuracy. Our research is solely for educational purposes, so please build your knowledge with us and use your strategy for investment.
