Synopsis
L&T faced a net profit decline of over 1% in Q3 FY25 despite a 17% increase in revenue. Operating margins were squeezed by rising costs, impacting various segments, particularly infrastructure and energy projects, while the IT segment reported growth yet faced profit declines.Key Takeaways
- Net profit fell to Rs 3,358.84 crore.
- Revenue grew by 17% to Rs 64,668 crore.
- Operating margins contracted due to rising costs.
- Infrastructure projects segment under pressure.
- International contracts comprise 42% of order book.
Mumbai, Jan 30 (NationPress) - Larsen & Toubro (L&T) experienced a net profit decrease of over 1 percent for the third quarter (Q3) of the fiscal year 2024-25, reporting Rs 3,358.84 crore, which is down from Rs 3,395.29 crore in the previous quarter (Q2 FY25), excluding non-controlling interests.
During Q3FY25, L&T's revenue grew by 17 percent, reaching Rs 64,668 crore, compared to Rs 55,128 crore in Q3FY24, as per its filing with the stock exchange.
However, despite this increase, the company did not meet market expectations, with analysts pointing to a contraction in L&T's operating margins.
The EBITDA margin fell by 70 basis points to 9.7 percent in Q3FY25, down from 10.4 percent the previous year.
This reduction was largely driven by a significant increase in costs. The prices of raw materials and components surged by 50 percent, while construction material expenses rose by 16 percent.
L&T’s infrastructure projects segment has been under margin pressure for several quarters.
The company had won infrastructure contracts at highly competitive prices in the wake of the COVID-19 pandemic and the geopolitical turmoil following the Russia-Ukraine conflict in 2022-23.
In the Energy Projects segment, operating margins also declined, with the EBITDA margin dropping to 8.3 percent in Q3FY25 from 9.7 percent the same period last year.
On a positive note, L&T’s IT & Technology Services segment reported a revenue increase of 7.7 percent, amounting to Rs 12,061 crore for the December quarter.
Even with revenue growth, profits from this segment decreased by 7 percent to Rs 1,833.8 crore.
The EBITDA margin for this segment dropped to 18.7 percent, down from 20.7 percent a year prior.
L&T remains hopeful for future performance in this segment, anticipating stronger revenue growth attributed to recent contract wins and positive consumer sentiment towards discretionary spending.
International billing constituted 93 percent of the total customer revenue in this segment.
The company's consolidated order book amounted to Rs 5,64,223 crore at the end of December 2024, with 42 percent originating from international markets. This marks a substantial increase from Rs 4,69,807 crore recorded the previous year.
