What leading brokerages expect from L&T's September quarter numbers.
The brokerage estimates net sales (revenue) to come in at Rs 34,188.6 crore, down 3.2 per cent on a year-on-year (YoY) basis but up 60.8 per cent quarter-on-quarter (QoQ). Earnings before interest, taxes, depreciation, and amortisation (EBITDA) is seen at Rs 3,864.9 crore, down 3.9 per cent YoY. However, on a sequential basis, the numbers are expected to rise 138.5 per cent. EBITDA margin is expected to drop 8 basis points (bps) YoY to 11.3 per cent while on a QoQ basis, the margin is seen expanding by 368 bps. Net profit or profit after tax (PAT) is seen at Rs 1,962.6 crore, down 22.3 per cent YoY but up 547.4 per cent on a QoQ basis.
The brokerage expects revenues to decline by 6.6 per cent YoY to Rs 33,006.2 crore while core Engineering, procurement, and construction (EPC) revenue (excluding electrical and automation business) is seen falling by nearly 9 per cent YoY with core EBIT margins declining by 150bps YoY to 7 per cent. It expects a core order inflow of Rs 20,000 crore during the period.
EBITDA is seen at Rs 3,441.5 crore, down 14.4 per cent YoY while PAT is estimated at Rs 1,497.6 crore, down 35.1 per cent YoY.
The brokerage expects reasonable execution pick-up sequentially as workers are gradually returning across sites reaching nearly 80-90 per cent of pre-Covid levels during the quarter. It notes that working capital and cash flow situation will be key monitorables. Consequently, it estimates adjusted standalone revenue (excluding E&A as discontinued operations) to decline 19.5 per cent YoY to Rs 15,102.3 crore. EBITDA is expected to fall 22.2 per cent YoY to Rs 1,208.2 crore with the margin down 30 bps to 8 per cent and adjusted PAT is likely to decline 50.7 per cent YoY to Rs 977.7 crore, partly due to higher other income and tax adjustments in the base quarter.
Analysts at the brokerage firm expect consolidated revenue to decline 16.6 per cent YoY to Rs 29,500 crore, EBITDA to decline 33.3 per cent YoY to Rs 2,680 crore, and EBITDA margin to decline 230 bps YoY to 9.1 per cent due to lower absorption of fixed costs. "We expect a 64.1 per cent YoY decline in PAT at Rs 910 crore with elevated interest expenses due to full commissioning of Hyderabad metro. We expect a 22 per cent decline in core E&C revenue with 260bps YoY decline in core EBITDA margin to 7.2 per cent. L&T’s reported Q2FY21 earnings are likely to include gain from the sale of E&A business," the brokerage said in an earnings preview note.