L&T Q1 Results Preview: PAT may jump 23% YoY, up to 17% revenue uptick likely. Order inflows, guidance remain key
However, sequential weakness in execution, margin compression, and a sharp decline in order inflows due to a high base and tender delays are likely to keep sentiment cautious.
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Up to 23% YoY PAT growth is expected, according to estimates by four brokerages viz. PhillipCapital, Nuvama Institutional Equities,
Motilal Oswal Financial Services
(MOFSL) and Kotak Institutional Equities.
Brokerages have estimated L&T's Q1 on the following 5 metrics:
1. Net Profit (PAT)
– PhillipCapital:
Rs 3,421 crore, up 23% YoY and down 33% QoQ
Live Events
– Nuvama:
Rs 3,300 crore, up 18% YoY and down 34% QoQ
– Motilal Oswal:
3,400 crore, up 21% YoY
– Kotak Equities:
Rs 3,372 crore, up 21% YoY and down 39% QoQ
A strong YoY growth is expected on the back of better execution but seasonal softness is likely to impact sequential earnings according to PhillipCapital while Nuvama attributes PAT growth to core execution despite muted inflows.
Kotak warns of sequential volatility due to seasonality and delayed execution.
2. Revenue
– PhillipCapital:
Rs 62,486 crore, up 13% YoY and down 16% QoQ
– Nuvama:
63,102 crore, up 14% YoY and down 15% QoQ
– Motilal Oswal:
61,800 crore, up 12%
– Kotak:
Rs 64,399 crore, up 16.8% YoY and down 13.4% QoQ
In a preview note Nuvama said that the GoI capex, ME hydrocarbons, and infra projects are driving growth, but private capex is still lagging while Motilal Oswal has attributed double-digit YoY revenue growth to 13% YoY growth in core E&C revenues. Kotak expects weakness in domestic execution partially offset by overseas activity.
3.EBITDA
– PhillipCapital:
Rs 6,311 crore, up 12% YoY and down 23% QoQ
– Nuvama:
6,499 crore, up 16% YoY and down 21% QoQ
– Motilal Oswal:
Rs 6,100 crore
– Kotak:
Rs 6,424 crore, up by 14.4% YoY and down 22% QoQ
Kotak suggests that lower margins in hydrocarbon project execution could limit EBITDA upside while PhillipCapital notes lower operating leverage due to weak order inflows.
4. EBITDA margin
– PhillipCapital:
10.1% versus 11% Q4FY25 and 10.2% Q1FY25
– Motilal Oswal:
9.9%
– Kotak:
10%, down 22 bps YoY and down 106 bps QoQ
Motilal sees core E&C margins at 7.8%, down QoQ due to a high base while Kotak expects core E&C EBITDA margin at 8%, up YoY on favorable mix but warns about hydrocarbon drag.
5. Key monitorables
Among key monitorables are order inflows, execution status of existing projects and guidance.
PhillipCapital expects a 30% YoY decline in Q1 inflows due to a high base and delayed domestic tenders. Kotak too echoes weak order inflows, citing slow project finalization early in the year.
Nuvama and Motilal will keep their eyes on execution ramp-ups in Saudi and GCC projects. Meanwhile, legacy project closures and progress on Hyderabad Metro refinancing to be tracked.
The Street will be watching the commentary on FY26 plans, working capital cycle trends, margin trajectory, and international bids.
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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