Larsen & Toubro 4QF16 Result Review 26-05-16 PDF

Institutional
Equity
Research
Larsen & Toubro

Capital Goods| India
LT IN; LART.BO
4QF16 result review

Current price (25 May)
Target price
Upside/(downside)
Earning estimate
Market data
Mkt capitalisation
Average daily vol
52-week H/L
Shares O/S
Free float
Promoter holding
Foreign holding
Face value
BUY
Rs
Rs
%
1,292
1,547
20
Revised
Rs bn
'000
Rs
mn
mn
%
%
Rs
1346.6
2757.1
1888 / 1016
931.8
931.8
0.0
15.2
2.0
Price performance (%)

Nifty (abs)
Stock (abs)
Relative to Index
1m
0.7
12.8
12.1
3m
14.1
30.1
16.0
Performance
2000
(Rs)
1800
6m
1.7
8.4
6.7
(%)
1yr
(3.8)
(10.7)
(6.9)
8
4
1600
1400
(4)
1200
(8)
1000
May-15 Aug-15
(12)
Nov-15 Feb-16 May-16
L&T (LHS)
Rel. to BSETCG (RHS)
Source: Bloomberg, SSLe
May 26, 2016
Execution on track
HAVL IN; HVEL.BO

Larsen & Toubro (L&T) reported a consolidated PAT of Rs24bn in 4QF16 vs. Rs20bn
YoY. During the quarter, consolidated margin stood at 14.8% vs. 12.9% YoY.
Standalone PAT at Rs26bn exceeded estimates, largely driven by significant
improvement in the margins. EBITDAM for the quarter stood at 15.2% vs13.1% in
4QF15. Order inflow declined 9%/12% during the quarter/year, coming at
Rs433bn/Rs1.36tn. Management has guided for 15% order inflow growth, along with
12-15% revenue growth and 50bps improvement in margin. We revise our TP to
Rs1,547 (earlier Rs1,474), based on SoTP valuation. We maintain BUY.
PAT exceeds expectations: Standalone PAT exceeded street and our expectations,
coming at Rs25.4bn, largely driven by significant improvement in the margins.
EBITDAM stood at 15.2% vs. 13.1% in 4QF15. For F16, margins came at 10.3%.
Consolidated PAT stood at Rs24bn vs. Rs20bn YoY. Consolidated margin stood at
14.8% vs. 12.9% YoY. PBIT margin for all segments, except Heavy Engineering and
Hydrocarbon remained buoyant. Infrastructure with 15.6% PBIT was the key for overall
improvement in the margins.
Order inflow in line: Order inflow declined 9%/12% during the quarter/year, coming at
Rs433bn/Rs1.36tn. This decline was largely in line with our expectations given the
current environment. Moreover, due to fierce competition in the power market, L&T was
unable to get many orders in the segment. Infrastructure and Hydrocarbon were the
major contributors to the order inflow in the current quarter.
Guidance strong for next round of growth: Management has guided for 15% growth
in the order inflow, mainly driven by Infrastructure, Power, Defence and Hydrocarbon.
Given that the companys order book amounts to Rs2.5tn, a revenue guidance of 1215% looks achievable. Management indicated that it could look at a margin expansion
of 50bps, largely attributable to the fact that the management expects its loss making
segments, i.e. Hydrocarbon and Heavy Engineering, to make profit in F17e. This
expansion would boost the overall margins by 50bps.
Strong performance of IT continues: IT and TES reported strong performance, with
PAT coming at Rs13.55bn. Financial services (including Insurance) reported a PAT of
Rs3.2bn, while development projects reported a loss of Rs6.9bn.
Balance sheet reduction a medium-term strategy: Management has indicated that
the company intends to reduce its balance sheet by selling its non-core assets. The
company intends to sell power assets and its Insurance business in the coming years.
L&T Infotech had filed for IPO.
Valuation and Outlook: Considering the companys strong execution and margin
profile in the current quarter and managements guidance, we have increased our
F17e/F18e EPS by 10.5% and 4.1%, respectively. We have increased our TP to
Rs1,547 (earlier Rs1,474) factoring in the increase in earnings. We maintain BUY.
Financial Summary - Consolidated
Y/E Mar (Rs mn)
Net sales
growth (%)
EBITDA margin (%)
Abhineet Anand
+91 22 4227 3310
abhineet.anand@sbicapsec.com
F15
F16
F17e
F18e
851,281
14.3
920,037
8.1
1,026,317
11.6
1,138,031
10.9
1,272,371
11.8
12.6
12.3
12.0
12.3
12.3
Adjusted net profit
46,263
45,046
48,453
53,291
62,505
EPS (Rs)
growth (%)
49.8
781.0
48.5
(2.6)
52.1
7.6
57.3
10.0
67.2
17.3
P/E (x)
25.9
26.6
24.7
22.5
19.2
EV/EBITDA (x)
18.3
18.4
18.1
17.3
16.7
0.1
0.1
0.1
0.1
0.1
12.9
11.4
11.3
11.5
12.3
6.0
5.0
4.7
4.5
4.5
Dividend yield (%)

RoE (%)
Aakash Fadia
+91 22 4227 3460
aakash.fadia@sbicapsec.com
F14
RoCE (%)
Source: Company, SSLe
SBICAP Research on Bloomberg SBICAP <GO>, www.securities.com
Please refer to our disclaimer given at the last page.
Larsen & Toubro
SBICAP Securities Ltd
Quarterly Financials - Standalone

Y/E Mar (Rs mn)
4QF16
4QF15 YoY (%)
210,610
189,679
Cost of goods
162,133
148,036
118,192
169,151
10,370
10,192
11,997
11,153
6,178
6,549
7,532
31,929
24,902
Other Expenses
EBITDA
EBITDAM (%)
Depreciation and amort.
EBIT
EBITM (%)
Other income
147,739
28.2
10,018
42.6
4QF16e
Net sales
Employee benefits exp.
11.0
3QF16 QoQ (%)
212,440
26,560
15.2
13.1
6.8
12.5
2,458
2,444
2,450
29,384
22,444
14.0
11.8
5.1
11.3
7,367
5,701
6,170
6,000
3,973
3,340
3,812
4,000
7,574
(0.9)
5,576
218.7
2,545
30.9
Var (%)
288.0
24,110
20.2
21.9
Forex (Loss)/Gain
Interest expenses
Extraordinary/Exceptional
Profit before tax
(773)
1,857
917
32,005
26,662
6,616
6,052
2,022
7,310
20.7
22.7
18.6
28.0
25,389
20,610
23.2
8,827
187.6
18,800
35.1
26,003
19,174
35.6
8,081
221.8
18,800
38.3
NPM (%)
12.3
10.1
5.5
8.8
EPS (Rs)
27.9
20.6
8.7
20.2
Tax expense
Effective tax rate (%)
PAT
20.0
10,849
195.0
26,110
22.6
Minority Interest
Adj. net profit
38.3
Segment Analysis
Standalone
(Rs mn)
4QF16
4QF15
YoY (%)
3QF16
QoQ (%)
Segment Revenue
Infrastructure
Power
Metallurgical and Material handling
Heavy Engineering
Electrical & Automation
Others
Total
159,488
142,779
11.7
97,846
19,005
14,252
33.3
21,075
63.0
(9.8)
9,047
9,250
(2.2)
6,780
33.4
9,462
9,388
0.8
8,256
14.6
12,360
13,157
(6.1)
10,853
13.9
7,789
7,421
5.0
7,909
217,151
196,246
10.7
152,717
42.2
40.9
8,332
230.9
(1.5)
Segment Results (PBIT)

Infrastructure
27,567
19,569
Power
494
519
(4.7)
794
(37.7)
820
608
34.9
(241)
(440.3)
(170)
(41.8)
Heavy Engineering
1,106
(108.9)
1,789
1,963
(8.9)
1,216
47.2
Others
1,032
998
3.4
1,358
(24.0)
31,604
24,764
27.6
11,289
180.0
17.3
13.7
357.9
8.5
877.0
2.6
3.6
(104.0)
3.8
(116.7)
249.1
(3.6)
1,262.1
(2.1)
101.1
Total
(99)
PBIT margin (%)

Infrastructure
Power
9.1
6.6
Heavy Engineering
(1.0)
11.8
(1,282.8)
14.5
14.9
(44.9)
11.2
327.2
Others
13.2
13.4
(19.8)
17.2
(392.3)
Total
14.6
12.6
193.5
7.4
716.2
abhineet.anand@sbicapsec.com I aakash.fadia@sbicapsec.com
May 26, 2016 | 2
Larsen & Toubro

Consolidated
(Rs mn)
4QF16
4QF15
Net Sales
328,123
280,226
Expenditure
282,978
244,125
YoY (%)
17.1
3QF16
253,871
5,387
Consumption of raw materials
42,557
32,720
41,665
Sub-contracting charges
65,983
61,660
52,153
Construction materials
74,296
68,985
48,558
(700)
(1,387)
3,750
4,460
3,395
Other operating exp
52,381
40,830
46,109
Staff
38,624
36,170
41,300
EBITDA
45,144
36,101
2,182
2,808
4,517
47,326
38,909
26,595
Depreciation and Amortisation
8,203
5,875
6,198
Interest expense
7,737
4,739
7,446
PBT
31,386
28,295
12,951
Tax
9,537
7,960
5,555
24,197
20,021
13.8
12.9
other income
PBDIT
Adjusted PAT
EBITDA margin (%)
29.2
231,793
(Increase)/Dec in stock&WIP
Purchase of trade goods
QoQ (%)
25.1
20.9
22,078
7,349
104.5
229.3
8.7
May 26, 2016 | 3
Larsen & Toubro

Consolidated
(Rs mn)
4QF16
4QF15
YoY (%)
3QF16
QoQ (%)
Segment Revenue
Infrastructure
186,549
156,849
18.9
121,124
21,850
14,480
50.9
22,956
(4.8)
9,239
9,528
(3.0)
6,942
33.1
Heavy Engineering
10,721
10,214
5.0
9,487
13.0
15,992
17,450
(8.4)
13,752
16.3
Hydrocarbon
24,875
22,350
11.3
21,839
13.9
IT & Technology Services
23,631
20,420
15.7
23,199
1.9
Financial Services
19,964
16,760
19.1
18,979
5.2
Developmental Projects
12,996
8,780
48.0
12,880
0.9
Power
Others
Total
54.0
20,282
16,350
24.0
17,093
18.7
346,098
293,181
18.0
268,250
29.0
29,147
19,449
49.9
8,776
232.1
1,947
1,442
35.0
1,815
7.3
814
599
36.0
Segment Results (PBIT)

Infrastructure
Power
Heavy Engineering
(234)
2,083
Hydrocarbon
(920)
816
(128.7)
2,345
(11.2)
(2,092)
(56.0)
4,292
3,830
12.1
Financial Services
2,114
2,114
(246)
(431.1)
(238)
(1.6)
1,142
82.4
393
(334.0)
4,594
(6.6)
2,720
(22.3)
622
1,246
(50.1)
1,078
(42.3)
2,668
2,910
(8.3)
3,530
(24.4)
42,534
32,659
30.2
23,564
80.5
15.6
12.4
Power
8.9
10.0
7.9
8.8
6.3
(3.5)
Others
Total
PBIT margin (%)
PBIT margin (%)
Infrastructure
7.2
Heavy Engineering
(2.2)
8.0
(2.5)
13.0
13.4
8.3
Hydrocarbon
(3.7)
(9.4)
1.8
18.2
18.8
19.8
Financial Services
10.6
12.6
14.3
4.8
14.2
8.4
13.2
17.8
20.7
Others
Estimate Revision
(Rs mn)
Sales
EBITDA
EBITDA margin (%)
Adj PAT
EPS (Rs/Share)
Revised
F17e
Old
F18e
F17e
Change (%)
F18e
1,138,031
1,272,371
1,149,499
1,292,498
140,136
157,109
130,042
150,986
12.3
53,291
57.3
12.3
62,505
67.2
11.3
48,216
51.9
11.7
60,063
64.6
F17e
F18e
(1.0)
(1.6)
7.8
4.1
100 bps
67 bps
10.5
4.1
10.5
4.1
Source: SSLe
May 26, 2016 | 4
Larsen & Toubro

1-year forward PE
45
(x)
36
27
Feb-16
May-16
Aug-15
Nov-15
Feb-15
May-15
Nov-14
Aug-14
Feb-14
May-14
Nov-13
Aug-13
May-13
Feb-13
Nov-12
Aug-12
May-12
Feb-12
Nov-11
May-11
Aug-11
18
Valuation
SOTP (Rs)
L&T Standalone - Core
Methodology
F18e
24x P/E
1,067
12x P/E
198
1.5x P/B
101
Subsidiaries
L&T Infotech and Other IT business
L&T Finance and other finance Business
L&T IDPL
1.25x Investments
Others (Valves, Realty, MIP, Power, E&A etc)

Power capacity
64
86
1400MW @ 1.25x book
31
Price Target
1,547
CMP
1,290
Upside (%)
19.9
May 26, 2016 | 5
Larsen & Toubro
Consolidated Financials
Income Statement
Y/E Mar (Rs mn)
Net sales
growth (%)
Operating expenses
EBITDA
growth (%)
Depreciation &amortisation
EBIT
Balance Sheet
F14
851,281
14.3
744,330
106,951
8.5
F15
F16
F17e
F18e
920,037 1,026,317 1,138,031 1,272,371

8.1
806,900
113,137
5.8
11.6
902,889
123,428
10.9
11.8
997,894 1,115,262
140,136
157,109
9.1
13.5
12.1
14,458
92,493
26,225
86,912
27,560
95,868
30,116
110,020
31,622
125,487
Other income
9,816
10,066
11,830
10,780
11,319
Interest paid
31,380
28,500
30,412
33,453
35,126
3,340
3,477
3,580
PBT
74,268
71,955
80,866
87,347
101,680
Tax
Effective tax rate (%)
26,106
35.2
22,532
31.3
25,487
31.5
28,824
33.0
33,554
33.0
Extraordinary/Exceptional items
Net profit
48,163
49,423
55,379
58,522
68,126
Minority interest
Reported Net profit
(266.5)
48,429
1988.6
47,434
4474.6
50,904
5231.5
53,291
5620.7
62,505
Non-recurring items
Adjusted Net profit
2,166
46,263
2,388
45,046
2,452
48,453
0
53,291
0
62,505
growth (%)
781.0
10.0
17.3
(2.6)
7.6
339
521
573
672
F15
F16
F17e
F18e
Key Financials ratios

Y/E Mar
Y/E Mar (Rs mn)
F14
F15
F16
F17e
40,968
34,054
37,465
46,829
753,442
871,584
1,010,276
1,178,261
81,088
81,088
81,088
81,088
Net fixed assets
250,292
255,552
257,992
252,876
Goodwill & intangible assets
215,450
215,450
215,450
215,450
358,580
1,699,821
418,931
1,876,660
491,129
2,093,400
578,067
2,352,571
Current liabilities
445,131
465,922
487,753
510,675
Borrowings
799,477
920,615
1,077,264
1,273,076
46,302
1,290,910
46,299
1,432,836
46,300
1,611,317
46,298
1,830,049
Cash & Bank balances

Other Current assets
Investments
Other non-current assets

Total assets
Other non-current liabilities

Total liabilities
Share capital
Reserves & surplus
Shareholders' funds
Minority interest
Total equity & liabilities
1,859
1,859
1,859
1,859
375,261
377,120
408,080
409,940
443,600
445,459
483,258
485,117
31,792
33,884
36,624
37,406
1,699,821
1,876,660
2,093,400
2,352,571
Cash Flow Statement

F14
Profitability and return ratios (%)
Y/E Mar (Rs mn)

Pre-tax profit
F15
66,259
F16
72,811
F17e
82,115
EBITDAM
12.6
12.3
12.0
12.3
12.3
14,458
26,225
27,560
30,116
EBITM
10.9
9.4
9.3
9.7
9.9
Chg in working capital
(87,501)
(92,550)
(114,135)
(145,838)
Total tax paid
(29,471)
(22,532)
(25,487)
(28,824)
Other operating activities
(38,607)
(40,699)
(48,964)
(57,607)
Operating CF
(69,631)
(63,297)
(88,215)
(120,038)
Capital expenditure
(66,787)
(36,485)
(35,000)
(30,000)
Chg in investments
7,787
3,631
(55,369)
(36,485)
(35,000)
(30,000)
(125,000)
(99,782)
(123,215)
(150,038)
NPM
5.4
4.9
4.7
4.7
4.9
RoE
12.9
11.4
11.3
11.5
12.3
RoCE
6.0
5.0
4.7
4.5
4.5
RoIC
4.3
3.6
3.4
3.2
3.3
Per share data (Rs)

O/s shares (mn)
Depreciation
F14
71,490
929.6
929.6
929.6
929.6
929.6
EPS
49.8
48.5
52.1
57.3
67.2
Other investing activities

Investing CF
FDEPS
49.8
48.5
52.1
57.3
67.2
FCF
CEPS
65.3
76.7
81.8
89.7
101.3
405.7
441.0
479.2
521.9
571.9
1.0
1.0
1.1
1.2
1.4
BV
DPS
Valuation ratios (x)
P/E
P/BV
EV/EBITDA
EV/Sales
25.9
26.6
24.7
22.5
19.2
3.2
2.9
2.7
2.5
2.3
18.3
18.4
18.1
17.3
16.7
2.3
2.3
2.2
2.1
2.1
Equity raised/(repaid)
1,441
Debt raised/(repaid)
172,450
121,138
156,649
195,812
Dividend (incl. tax)
(14,184)
(10,907)
(11,804)
(13,634)
Other financing activities

Financing CF
(29,455)
130,252
(17,363)
92,868
(18,220)
126,625
(22,776)
159,402
Net chg in cash & bank bal.

Closing cash & bank bal
5,252
(6,913)
3,410
9,364
40,968
34,054
37,465
46,829
Other key ratios

D/E (x)
2.1
2.2
2.4
2.6
2.8
DSO (days)
106
110
108
108
106
NPM (%)
5.4
4.9
4.7
4.7
4.9
Asset turnover (x)
0.5
0.5
0.5
0.5
0.5
Equity multiplier(x)
4.4
4.5
4.6
4.8
4.9
12.9
11.4
11.3
11.5
12.3
Du Pont Analysis - RoE
RoE (%)
May 26, 2016 | 6
Larsen & Toubro
Recommendation History
Date
BUY
HOLD
Stock Price
1800
SELL
Target Price
Stock Price
TP
Rec.
01-Apr-16
1,228
1,474
BUY
25-May-16
1,292
1,547
BUY
1600
(Rs)
1400
1200
1000
May-16
Mar-16
Jan-16
Nov-15
Sep-15
Jul-15
May-15
Mar-15
Jan-15
Nov-14
Sep-14
Jul-14
May-14
Mar-14
600
Jan-14
800
SBICAP Securities Limited

(CIN): U65999MH2005PLC155485 | Research Analyst Registration No INH000000602
SEBI Registration No.: NSE Capital Market: INB 231052938 | NSE Derivatives: INF 231052938 |BSE Capital Market: INB 011053031
Currency Derivatives: INE 231052938 | CDSL: IN-DP-CDSL-370-2006 | IRDA/IR2/2014/241
Corporate Office:
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Tel.: 91-22-42273300/01 | Fax: 91-22-42273335 | Email: sbicapresearch@sbicapsec.com | www.sbismart.com
KEY TO INVESTMENT RATINGS (w.e.f. February 2013)

Guide to the expected return over the next 12 months. 1=BUY (expected to give absolute returns of 15 or more percentage points); 2=HOLD (expected to
give absolute returns between -10 to 15 percentage points); 3=SELL (expected to give absolute returns less then -10 percentage points)
DISCLOSURES & DISCLAIMERS

Analyst Certification
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Securities Limited (SSL) about any and all of the subject issuer(s) or company(ies) or securities. This report has been prepared based upon information
available to the public and sources, believed to be reliable. I/We also certify that no part of my/our compensation was, is, or will be directly or indirectly
related to the specific recommendation(s) or view(s) in this report.
The Analysts engaged in preparation of this Report or his/her relative:(a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1% or more of the equity securities of the subject
company mentioned in the report as of the last day of the month preceding the publication of the research report; (c) do not have any material conflict of
interest at the time of publication of the Report.
The Analysts engaged in preparation of this Report:(a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or co-managed public offering of
securities for the subject company in the past twelve months; (c) have not received any compensation for investment banking or merchant banking or
brokerage services from the subject company in the past twelve months; (d) have not received any compensation for products orservices other than
investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) have not received any
compensation or other benefits from the subjectcompany or third party in connection with the Report; (f) has not served as an officer, director or employee
of the subject company; and (g) are not engaged in market making activity for the subject company.
Name
Qualification
Designation
Abhineet Anand
B.E (Mechanical), PGDM (Finance)
Analyst
Aakash Fadia
BMS (Finance), MMS (Finance)
Associate
May 26, 2016 | 7
Larsen & Toubro
Other Disclosures
SBICAP Securities Limited (SSL), a full service Stock Broking company, is engaged in diversified financial services business, including equity broking, DP services, distribution
of Mutual Fund, insurance products and other financial products.SSL is a member of National Stock Exchange of India Limited and BSE Limited. SSL is also a Depository
Participant registered with NSDL & CDSL. SSL is a large broking house catering toretail, HNI and institutional clients. It operates through its branches and authorized persons
spread across the country and the clients are provided online trading through internet and offline trading through branches and call & trade facility. SSL is a wholly owned
subsidiary of SBI Capital Markets Limited (SBICAP), which is engaged into investment banking, project advisory and financial services activities and is registered with the
Securities and Exchange Board of India as a Category I Merchant Banker. SBICAP is a wholly owned subsidiary of State Bank of India. Hence, State Bank of India and all its
subsidiaries, including SBICAP and banking subsidiaries are treated and referred to as Associates of SSL.
We hereby declare that our activities were neither suspended nor we have materially defaulted with any stock exchange authority with whom we are registered in last five years.
However SEBI, Exchanges and Depositories have conducted the routine inspection and based on their observations have issued advice letters or levied minor penalty for certain
procedural lapses. We have not been debarred from doing business by any Stock Exchange/SEBI or any other authorities; nor has our certificate of registration been cancelled by
SEBI at any point of time.
SSL or its Associates may: (a) from time to time, have long or short position in, and buy or sell the securities of the company mentioned in the Report or (b) be engaged in any
other in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company discussed
herein or act as an advisor or lender/borrower to such company or may have any other potential conflict of interests with respect to any recommendation and other related
information and opinions.
SSL does not have actual/beneficial ownership of one per cent or more securities of the subject company at the end of the month immediately preceding the date of publication of
the Report. However, since Associates of SSL are engaged in the financial services business, they might have in their normal course of business financial interests or actual /
beneficial ownership of one per cent or more in various companies including the subject company mentioned herein this Report.
SSL or its Associates might have managed or co-managed public offering of securities for the subject company in the past twelve months and might have received compensation
from the companies mentioned in the Report during the period preceding twelve months from the date of this Report for services in respect of managing or co-managing public
offerings/corporate finance, investment banking or merchant banking, brokerage services or other advisory services in a merger or specific transaction.
Compensation paid to Analysts of SSL is not based on any specific merchant banking, investment banking or brokerage service transaction.
SSL or its Associate did not receive any compensation or any benefit from the subject company or third party in connection with preparation of this Report.
This Report is for the personal information of the authorized recipient(s) and is not for public distribution and should not be reproduced, transmitted or redistributed to any other
person or in any form without SSLs prior permission. The information provided in the Report is from publicly available data, which we believe, are reliable. While reasonable
endeavors have been made to present reliable data in the Report so far as it relates to current and historical information, but SSL does not guarantee the accuracy or
completeness of the data in the Report. Accordingly, SSL or any of its Associates including directors and employees thereof shall not be in any way responsible or liable for any
loss or damage that may arise to any person from any inadvertent error in the information contained, views and opinions expressed in this Report or in connection with the use of
this Report.
Please ensure that you have read Risk Disclosure Document for Capital Market and Derivatives Segments as prescribed by Securities and Exchange Board of India before
investing in Indian securities market.
The projections and forecasts described in this Report should be carefully evaluated as these :
1.
2.
3.
4.
Are based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies.
Can be expected that some of the estimates on which these were based, will not materialize or will vary significantly from actual results, and such variances may increase
over time.
Are not prepared with a view towards compliance with published guidelines or generally accepted accounting principles. No independent accountants have expressed an
opinion or any other form of assurance on these.
Should not be regarded, by mere inclusion in this report, as a representation or warranty by or on behalf of SSL the authors of this report, or any other person, that these or
their underlying assumptions will be achieved.
This Report is for information purposes only and SSL or its Associates accept no liabilities for any loss or damage of any kind arising out of the use of this report. Though
disseminated to recipients simultaneously, not all recipients may receive this report at the same time. SSL will not treat recipients as clients by virtue of their receiving this report. It
should not be construed as an offer to sell or solicitation of an offer to buy, purchase or subscribe to any securities this report shall not form the basis of or be relied upon in
connection with any contract or commitment, whatsoever. This report does not solicit any action based on the material contained herein.
It does not constitute a personal recommendation and does not take into account the specific investment objectives, financial situation/circumstances and the particular needs of
any specific person who may receive this document. The securities discussed in this Report may not be suitable for all the investors. SSL does not provide legal, accounting or tax
advice to its clients and you should independently evaluate the suitability of this Report and all investors are strongly advised to seek professional consultation regarding any
potential investment.
Certain transactions, including those involving futures, options, and other derivatives as well as non-investment grade securities, give rise to substantial risk and are not suitable
for all investors. Foreign currency denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of or income derived
from the investment.
The price, value and income of the investments referred to in this Report may fluctuate and investors may realize losses on any investments. Past performance is not a guide for
future performance. Actual results may differ materially from those set forth in projections. SSL has reviewed the Report and, the current or historical information included here is
believed to be reliable, the accuracy and completeness of which is not guaranteed. SSL does not have any obligationto update the information discussed in this Report.
The opinions expressed in this report are subject to change without notice and SSL or its Associates have no obligation to tell the clients when opinions or information in this
report change. This Report has not been approved and will not or may not be reviewed or approved by any statutory or regulatory authority in India, United Kingdom or Singapore
or by any Stock Exchange in India, United Kingdom or Singapore. This report may not be all inclusive and may not contain all the information that the recipient may consider
material.
The securities described herein may not be eligible for sale in all jurisdictions or to all categories of investors. The countries in which the companies mentioned in this Report are
organized may have restrictions on investments, voting rights or dealings in securities by nationals of other countries. Distributing /taking/sending/dispatching/transmitting this
document in certain foreign jurisdictions may be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any
such restrictions. Failure to comply with this restriction may constitute a violation of laws in that jurisdiction.
Legal Entity Disclosure

Singapore: This Report is distributed in Singapore by SBICAP (Singapore) Limited (Registration No. 201026168R), an Associate of SSL incorporated in Singapore. SBICAP
(Singapore) Limited is regulated by the Monetary Authority of Singapore as a holder of a Capital Markets Services License and an Exempt Financial Adviser in Singapore.
SBICAP (Singapore) Limiteds services are available solely to persons who qualify as Institutional Investors or Accredited Investors (other than individuals) as defined in section
4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (the SFA) and this Report is not intended to be distributed directly or indirectly to any other class of persons.
Persons in Singapore should contact SBICAP (Singapore) Limited in respect of any matters arising from, or in connection with this report via email at singapore.sales@sbicap.sg
or by call at +65 6709 8651.
United Kingdom: SBICAP (UK) Limited, a fellow subsidiary of SSL, incorporated in United Kingdom is authorised and regulated by the Financial Conduct Authority. This
marketing communication is being solely issued to and directed at persons (i) fall within one of the categories of Investment Professionals as defined in Article 19(5) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Financial Promotion Order), (ii) fall within any of the categories of persons
described in Article 49 of the Financial Promotion Order (High net worth companies, unincorporated associations etc.) or (iii) any other person to whom it may otherwise lawfully
be made available (together Relevant Persons) by SSL. The materials are exempt from the general restriction on the communication of invitations or inducements to enter into
investment activity on the basis that they are only being made to Relevant Persons and have therefore not been approved by an authorised person as would otherwise be
required by section 21 of the Financial Services and Markets Act 2000 (FSMA).
May 26, 2016 | 8

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Institutional

Larsen & Toubro

4QF16 result review

Price performance (%)

Rel. to BSETCG (RHS)

Source: Bloomberg, SSLe

May 26, 2016

HAVL IN; HVEL.BO

Adjusted net profit

Dividend yield (%)

SBICAP Research on Bloomberg SBICAP <GO>, www.securities.com

Please refer to our disclaimer given at the last page.

Larsen & Toubro

SBICAP Securities Ltd

Quarterly Financials - Standalone

4QF15 YoY (%)

Employee benefits exp.

3QF16 QoQ (%)

Source: Company, SSLe

Segment Results (PBIT)

Metallurgical and Material handling

Electrical & Automation

PBIT margin (%)

Electrical & Automation

Source: Company, SSLe

May 26, 2016 | 2

Larsen & Toubro

SBICAP Securities Ltd

Consumption of raw materials

Other operating exp

Depreciation and Amortisation

Purchase of trade goods

Source: Company, SSLe

May 26, 2016 | 3

Larsen & Toubro

SBICAP Securities Ltd

Electrical & Automation

IT & Technology Services

Segment Results (PBIT)

Electrical & Automation

IT & Technology Services

Metallurgical and Material handling

Electrical & Automation

IT & Technology Services

May 26, 2016 | 4

Larsen & Toubro

SBICAP Securities Ltd

Source: Bloomberg, SSLe

Others (Valves, Realty, MIP, Power, E&A etc)

1400MW @ 1.25x book

Source: Company, SSLe

May 26, 2016 | 5

Larsen & Toubro

SBICAP Securities Ltd

920,037 1,026,317 1,138,031 1,272,371

Key Financials ratios

Y/E Mar (Rs mn)

Net fixed assets

Goodwill & intangible assets

Cash & Bank balances

Other non-current assets

Other non-current liabilities