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Larsen & Toubro Performance Highlights Y/E March ( ` cr) 4QFY12 4QFY11 3QFY12 % chg
Larsen & Toubro Performance Highlights Y/E March ( ` cr) 4QFY12 4QFY11 3QFY12 % chg

Larsen & Toubro

Performance Highlights

Y/E March (` cr)

4QFY12

4QFY11

3QFY12

% chg (yoy)

% chg (qoq)

Net sales

18,461

15,384

13,999

20.0

31.9

Op. profit

2,561

2,341

1,343

9.4

90.7

Adj. net profit

1,843

1,537

839

19.9

119.7

Source: Company, Angel Research

Larsen and Toubro (L&T) posted a good set of numbers for 4QFY2012, which were broadly in-line with our expectations; however, the company disappointed on the order inflow front. As of 4QFY2012, L&T’s order backlog stands at `1,45,723cr, 11.0% yoy growth. Order inflow for the quarter declined by 30.2% to `21,159cr, taking the order inflow for FY2012 to `70,574cr (down 12% yoy). We prefer L&T over its peers, as it is a market leader and fundamentally the strongest infrastructure company. We maintain L&T as our top pick in the sector and, hence, continue to recommend Buy on the stock.

Performance in-line with estimates: On the top-line front, L&T reported decent top-line growth of 20.0% yoy to `18,461cr, marginally below our estimate of `18,945cr. On the EBITDA front, performance was as per our expectations, with the company reporting a yoy dip of 130bp to 13.9% against our expectation of 13.7%. On the bottom-line front, L&T reported 13.9% yoy growth to `1,920cr, marginally higher than our estimate of `1,862cr, owing to exceptional gain (`55cr) and lower tax rate (26.9%).

Outlook and valuation: For FY2013, management has given a guidance of 15-20% growth for both revenue and order inflow. We believe although the company can achieve this guidance on the revenue front, given its robust order backlog, it would be difficult to achieve 15-20% growth on the order inflow front, considering the challenging macro environment and hence are factoring order inflow growth of 10.6% for FY2013. We believe L&T is best placed to benefit from the gradual recovery in capex cycle, given its diverse exposure to sectors, strong balance sheet and cash flow generation as compared to peers. We maintain L&T as our top pick in the sector and maintain our Buy rating on the stock with a target price of `1,553.

Key financials (Standalone)

Y/E March (` cr)

FY2011

FY2012E

FY2013E

FY2014E

Net sales

43,905

53,171

59,559

69,089

%

chg

18.6

21.1

12.0

16.0

Adj. net profit

3,342

3,993

4,369

4,720

%

chg

15.5

19.5

9.4

8.0

FDEPS (`)

54.1

64.7

70.8

76.5

EBITDA margin (%)

12.9

11.8

12.1

11.5

P/E (x)

21.4

17.9

16.4

15.2

RoAE (%)

16.6

17.0

16.1

15.3

RoACE (%)

18.5

17.7

17.2

16.3

P/BV (x)

3.3

2.8

2.5

2.2

EV/Sales (x)

1.8

1.5

1.3

1.2

EV/EBITDA (x)

13.7

12.3

11.1

10.1

Source: Company, Angel Research

4QFY2012 Result Update | Infrastructure

May 14, 2012

BUY

CMP

`1,160

Target Price

`1,553

Investment Period

12 Months

Stock Info

Sector Market Cap (` cr)

 

Infrastructure

 

71,026

Beta

1.3

52 Week High / Low

1,868/971

Avg. Daily Volume

365,809

Face Value (`)

2

BSE Sensex

16,216

Nifty

4,908

Reuters Code
Reuters Code
 

LART.BO

Bloomberg Code

LT@IN

Shareholding Pattern (%)

 

Promoters

0.0

MF / Banks / Indian Fls

 

43.8

FII / NRIs / OCBs

19.7

Indian Public / Others

 

36.6

Abs. (%)

3m

1yr

3yr

Sensex

(9.2)

(12.5)

36.6

LNT

(15.9)

(24.1)

22.4

Nitin Arora

022-39357800 Ext: 6842 nitin.arora@angelbroking.com

Exhibit 1: Quarterly performance (Standalone) Larsen & Toubro | 4QFY2012 Result Update

Exhibit 1: Quarterly performance (Standalone)

Larsen & Toubro | 4QFY2012 Result Update

Y/E March (` cr)

4QFY12

4QFY11

3QFY12

% Chg (yoy)

% Chg (qoq)

FY2012

FY2011

% Chg

Net sales

18,461

15,384

13,999

20.0

31.9

53,171

44,013

18.8

Total expenditure

15,900

13,043

12,655

21.9

25.6

46,888

38,422

18.9

Operating profit

2,561

2,341

1,343

9.4

90.7

6,283

5,591

18.6

OPM (%)

13.9

15.2

10.4

(130)bp

350bp

11.8

12.7

(100)bp

Interest

121

136

191

(11.1)

(36.5)

666

647

30.5

Depreciation

180

236

180

(23.5)

0.0

699

599

44.5

Non operating income

263

370

230

(28.8)

14.6

930

1,045

15.2

Extraordinary/Dividend from subs

106

149

219

(28.9)

(51.6)

463

436

(106.2)

Profit before tax

2,629

2,488

1,421

5.7

85.0

6,310

5,826

(3.5)

Tax

708

802

429

(11.7)

65.0

1,854

1,868

12.4

Reported net profit

1,920

1,686

992

13.9

93.7

4,456

3,958

(9.5)

PAT (%)

10.4

11.0

7.1

(60)bp

330bp

8.4

9.0

(60)bp

Reported EPS

31.1

27.3

16.1

13.9

93.7

72.2

64.1

(12.3)

Adjusted profit after tax

1,843

1,537

839

19.9

119.7

4,109

3,616

9.1

Adj. PAT (%)

10.0

10.0

6.0

-

400bp

7.7

8.2

(50)bp

Adj. FDEPS

29.9

24.9

13.6

19.9

119.7

66.6

58.6

8.9

Source: Company, Angel Research

Exhibit 2: 4QFY2012 Actual vs. Estimates

(` cr)

Estimates

Actual

Variation (%)

Net Sales

18,945

18,461

(2.6)

EBITDA

2,595

2,561

(1.3)

Interest

200

121

(39.5)

Tax

842

708

(15.9)

Reported PAT

1,862

1,920

3.1

Source: Company, Angel Research

Key highlights of the analyst meet

L&T’s management is fairly confident on delivering 15-20% growth on the order inflow and revenue front. The company is eyeing infrastructure, (including roads, metro rails, DFC and airports), hydrocarbon, buildings and power T&D for getting orders.

Further, L&T is already L1 in `12,000cr-15,000cr orders, which were supposed to be awarded in FY2012 but got spilled over to FY2013.

L&T is also looking to diversify/expand in new geographies (Saudi Arabia, Kuwait, Iraq, Indonesia and Brazil). Further the company is hoping to increase its order inflow from outside India, from 18% currently to 25%.

For the power sector, L&T believes the generation segment would continue to suffer in the near term, given the structural issues faced by the sector.

Despite heightened competitive intensity, management has clarified that it has enough levers at its disposal to ensure that the current EBITDA margin (+/-50bp) is maintained for FY2013.

Larsen & Toubro | 4QFY2012 Result Update Top line grows by healthy 20% For 4QFY2012,

Larsen & Toubro | 4QFY2012 Result Update

Top line grows by healthy 20%

For 4QFY2012, L&T reported decent top-line growth of 20.0% yoy to `18,461cr, marginally below our estimate of `18,945cr. This was mainly on account of pick-up in the E&C segment, which recorded 23.4% top-line growth to `16,638cr.

Revenue and order inflow guidance for FY2013 at 15-20%

For FY2013, management has given a guidance of 15-20% growth for both revenue and order inflow. L&T’s order backlog currently stands at `1,45,723cr, 11.0% yoy growth. Order inflow for the quarter declined by 30.2% to `21,159cr, taking the order inflow for FY2012 to `70,574cr (down 12% yoy). However, management is confident of achieving order inflow of `80,000cr-84,000cr during FY2013. We believe although the company can achieve this guidance on the revenue front, given its robust order backlog, it would be difficult to achieve 15-20% growth on the order inflow front, considering the challenging macro environment.

Exhibit 3: Stable execution expected going ahead 20,000 50.0 40.5 18,000 40.0 16,000 28.1 14,000
Exhibit 3: Stable execution expected going ahead
20,000
50.0
40.5
18,000
40.0
16,000
28.1
14,000
25.3
30.0
17.8 20.3 20.5 22.7 20.0
12,000
10,000
13.2
20.0
8,000
7.3
6.4
3.0
10.0
6,000
4,000
(5.7)
-
2,000
0
(10.0)
Sales (` cr, LHS)
Growth (yoy %, RHS)
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12

Source: Company, Angel Research

Exhibit 4: Order inflow disappoints 35,000 160.0 139.5 140.0 30,000 120.0 25,000 100.0 63.3 80.0
Exhibit 4: Order inflow disappoints
35,000
160.0
139.5
140.0
30,000
120.0
25,000
100.0
63.3
80.0
20,000
47.5
60.0
28.2
15,000
23.4 27.1
40.0
11.4 3.6
10,000
20.0
(16.9)
(21.8)
(21.3)
(24.9)
-
(30.2)
5,000
(20.0)
-
(40.0)
Order Booking (` cr, LHS)
Growth (yoy %, RHS)
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12

Source: Company, Angel Research

Larsen & Toubro | 4QFY2012 Result Update EBITDA margin in-line with estimates On the EBITDA

Larsen & Toubro | 4QFY2012 Result Update

EBITDA margin in-line with estimates

On the EBITDA front, performance was as per our expectations, with the company

reporting a yoy dip of 130bp to 13.9% against our expectation of 13.7% for the quarter. For FY2012, EBITDAM stood lower by 100bp to 11.8%. EBITDAM was lower as: 1) MCO expenses were impacted by higher input costs; and 2) staff cost increased primarily due to compensation restructuring and manpower buildup.

We note that the dip in EBITDAM is in the range guided by the management

(75-125bp for FY2012). This guidance was on the back of change in order book

mix towards infrastructure projects (which yields lower margins compared to the

other segments), enhanced competition witnessed in all segments with no respite in

sight and fluctuations in commodity prices. Further, going ahead, management believes that EBITDAM should be at 11.3-12.3%.

Bottom line beats estimates owing to lower tax rate

On the bottom-line front, L&T reported yoy growth of 13.9% to `1,920cr in

4QFY2012, marginally higher than our estimate of `1,862cr, due to exceptional gain (`55cr) and lower tax rate (26.9%).

Exhibit 5: Margin trend 3,000 15.0 12.3 15.1 12.8 16.0 15.2 13.9 14.0 11.9 2,500
Exhibit 5: Margin trend
3,000
15.0
12.3 15.1 12.8
16.0
15.2 13.9
14.0
11.9
2,500
11.2 10.6
10.8 10.8
10.4 9.6
12.0
2,000
10.0
1,500
8.0
6.0
1,000
4.0
500
2.0
0
-
EBITDA (` cr, LHS)
EBITDAM (%, RHS)
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12

Source: Company, Angel Research

Exhibit 6: PATM aided by lower tax rate 2,000 12.0 10.4 10.0 10.0 10.0 1,800
Exhibit 6: PATM aided by lower tax rate
2,000
12.0
10.4
10.0
10.0
10.0
1,800
10.0
1,600
8.0
7.6
7.6
7.3
1,400
7.0
7.0
7.0
6.6
8.0
6.0
1,200
1,000
6.0
800
4.0
600
400
2.0
200
0
-
Adj. PAT (` cr, LHS)
PATM (%, RHS)
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12

Source: Company, Angel Research

Larsen & Toubro | 4QFY2012 Result Update Segmental performance Engineering and construction (E&C): The E&C

Larsen & Toubro | 4QFY2012 Result Update

Segmental performance

Engineering and construction (E&C): The E&C segment, which contributed ~90% to the company’s gross revenue, witnessed good traction and recorded growth of 22.3% yoy for the quarter to `16,709cr, primarily on account of strong execution of its order book. On the margin front, the segment witnessed a dip of 100bp on a yoy basis to 13.6%, but reported a jump of 330bp on a sequential basis.

Machinery and industrial products (MIP): The MIP segment witnessed pressures of low level of mining activities and slowing industrial capex, resulting into a decline of 5.7% on a yoy basis to `817cr; however, the segment grew by 13.5% on a sequential basis. EBIT margin, at 16.3%, also witnessed contraction of 370bp yoy and 180bp qoq during the quarter.

Electrical and electronics (E&E): The E&E segment witnessed decent revenue during the quarter, as it recorded 14.2% yoy growth to `1,143cr. EBIT margin came in at 13.9%, registering a dip of 130bp on a yoy basis.

Exhibit 7: Segmental performance

Y/E March (` cr)

4QFY12

4QFY11

3QFY12

% chg (yoy)

% chg (qoq)

Revenue

18,646

15,519

14,155

20.2

31.7

Engg & Const. (E&C)

16,709

13,664

12,465

22.3

34.0

Mach. & Ind. Products (MIP)

817

866

720

(5.7)

13.5

Electrical & Electronics (E&E)

1,143

1,001

843

14.2

35.7

Others

275

211

267

30.6

2.9

Intersegment revenue

298

224

139

33.2

113.9

EBIT

2,602

2,361

1,552

10.2

67.7

Engg. & Const.

2,265

1,991

1,282

13.8

76.7

Mach. & Ind. Products

133

173

130

(23.1)

2.5

Electrical & Electronics

159

152

72

4.8

122.8

Others

32

46

68

(29.2)

(52.2)

Intersegment margins

(12)

1

-

0.0

0.0

EBIT (%)

14.0

15.2

11.0

(120) bp

300 bp

Engg. & Const.

13.6

14.6

10.3

(100) bp

330 bp

Mach. & Ind. Products

16.3

20.0

18.1

(370) bp

(180)bp

Electrical & Electronics

13.9

15.2

8.5

(130) bp

540 bp

Others

11.8

21.8

25.4

(1000) bp

(1360) bp

Capital Employed

35,252

29,271

33,868

20.4

4.1

Engg. & Const.

10,807

7,546

10,438

43.2

3.5

Mach. & Ind. Products

701

470

682

49.1

2.8

Electrical & Electronics

1,363

1,186

1,344

14.9

1.4

Others

600

543

677

10.6

(11.4)

Unallocable

21,780

19,525

20,727

11.5

5.1

Source: Company, Angel Research

Larsen & Toubro | 4QFY2012 Result Update Subsidiary performance L&T InfoTech registers decent performance

Larsen & Toubro | 4QFY2012 Result Update

Subsidiary performance

L&T InfoTech registers decent performance

L&T InfoTech, the company’s technology subsidiary, reported a decent performance for 4QFY2012, registering 16.5% yoy growth in revenue to `817cr. On the profitability front, the subsidiary reported NPM of 13.2% with profit of `110cr during the quarter.

Order book analysis

As of 4QFY2012, L&T stands tall on an order backlog of `1,45,723cr. Order inflow for 4QFY2012 came in at `21,159cr, down 30.2% yoy, taking the order inflow for FY2012 to `70,574cr. For FY2012, ~18% orders came from the international market, owing to traction on the hydrocarbon/T&D space. L&T’s order book is majorly dominated by the infra (43%) and power (28%) segments. Process (15%), hydrocarbon (10%) and others (4%) constitute the remaining part of the order book. The company has given a guidance of 15-20% for order booking in FY2013, which is above our expectations.

Client wise, 35% of L&T’s outstanding order book comes from the public sector and 48% comes from the private sector. Captive work orders account for the balance 17%. Notably, there has been a drop in the share of public sector orders in the past few quarters.

Exhibit 8: Decline in order booking for 4QFY2012 (` cr)

35,000

30,000

25,000

20,000

15,000

10,000

5,000

-

30,313 23,843 21,159 18,365 20,464 17,793 15,626 17,129 16,190 16,096 13,366 9,571 Process Hydrocarbon Power
30,313
23,843
21,159
18,365
20,464
17,793
15,626
17,129
16,190 16,096
13,366
9,571
Process
Hydrocarbon
Power
Infrastructure
Others
Total
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12

Source: Company, Angel Research

Exhibit 9: Order book composition (`1,45,723cr)

160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 - Process Hydrocarbon Power Infrastructure Others
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
Process
Hydrocarbon
Power
Infrastructure
Others
4QFY09
1QFY10
2QFY10
3QFY10
4QFY10
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
2QFY12
3QFY12
4QFY12

Source: Company, Angel Research

Larsen & Toubro | 4QFY2012 Result Update Outlook and valuation We maintain our Buy rating

Larsen & Toubro | 4QFY2012 Result Update

Outlook and valuation

We maintain our Buy rating with a target price of `1,553

We believe L&T will continue to occupy a unique position in the Indian E&C space as a diversified and large engineering play, with exposure to areas ranging from power, defense, nuclear to equipment, in spite of short-term concerns.

At the CMP of `1,160, the stock is trading at 15.2x FY2014E earnings and 2.2x FY2014E P/BV on a standalone basis. We have used the sum-of-the-parts (SOTP) methodology to value the company to capture all its business initiatives and investments/stakes in different businesses. Ascribing separate values to its parent business on a P/E basis and investments in subsidiaries on P/E, P/BV and mcap basis, our target price works out to `1,553. We maintain our Buy recommendation on the stock.

It may be noted here that the L&T stock has historically traded at a premium to the BSE Sensex. At our SOTP target price, the stock would trade at 20.1x FY2014E standalone adjusted EPS of `76.5, which is at a premium of 38.6% over Angel’s FY2014E Sensex target P/E multiple of 14.5x and lower than the historical premium commanded by L&T over BSE Sensex.

Exhibit 10: L&T – Parent historic P/E multiple premium to BSE Sensex 140% 120% 100%
Exhibit 10: L&T – Parent historic P/E multiple premium to BSE Sensex
140%
120%
100%
80%
60%
40%
20%
0%
L&T Premium/(Discount) to Sensex
7YEAR AVG
5YEAR AVG
3YEAR AVG
14-May-05
14-Aug-05
14-Nov-05
14-Feb-06
14-May-06
14-Aug-06
14-Nov-06
14-Feb-07
14-May-07
14-Aug-07
14-Nov-07
14-Feb-08
14-May-08
14-Aug-08
14-Nov-08
14-Feb-09
14-May-09
14-Aug-09
14-Nov-09
14-Feb-10
14-May-10
14-Aug-10
14-Nov-10
14-Feb-11
14-May-11
14-Aug-11
14-Nov-11
14-Feb-12
14-May-12

Source: Company, Angel Research

On one-year forward P/E basis, historically L&T has traded at an average P/E of 27.2x, 28.6x and 28.6x over the past seven, five and three years, respectively. Thus, our implied target P/E multiple of 20.1x is way below its historical average to factor in the prevailing challenging business environment.

Larsen & Toubro | 4QFY2012 Result Update Exhibit 11: L&T – Parent one-year forward P/E

Larsen & Toubro | 4QFY2012 Result Update

Exhibit 11: L&T – Parent one-year forward P/E band 70.0 60.0 50.0 40.0 30.0 20.0
Exhibit 11: L&T – Parent one-year forward P/E band
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
P/E
7YEAR AVG
5YEAR AVG
3YEAR AVG
14-May-05
14-Aug-05
14-Nov-05
14-Feb-06
14-May-06
14-Aug-06
14-Nov-06
14-Feb-07
14-May-07
14-Aug-07
14-Nov-07
14-Feb-08
14-May-08
14-Aug-08
14-Nov-08
14-Feb-09
14-May-09
14-Aug-09
14-Nov-09
14-Feb-10
14-May-10
14-Aug-10
14-Nov-10
14-Feb-11
14-May-11
14-Aug-11
14-Nov-11
14-Feb-12
14-May-12

Source: Company, Angel Research

Exhibit 12: Derivation of SOTP-based target price for L&T (FY2014E)

Business Segment

Methodology

 

Remarks

` cr

`/share

% to TP

L&T- Parent

P/E

16x FY2014E Earnings

75,513

1,223

78.8

 

Infrastructure Subsidiaries

3,632

59

3.8

IDPL (stake - 97.5%)

P/BV

L&T acq. 2.36% stake of IDFC at Rs118cr in

3,632

59

3.8

 
 

1QFY11

Key Subsidiaries - Services

11,058

179

11.5

L&T Infotech

P/E

12x FY2014E Earnings

6,421

104

6.7

 

L&T Finance

Mcap Basis

20% holding company discount

4,636

75

4.8

Key Subsidiaries - Manufacturing

3,319

54

3.5

 

Tractor Engineers

P/E

5x FY2014E Earnings

89

1

0.1

Associate Companies

P/E

5x FY2014E Earnings

2,000

32

2.1

 

L&T MHI Boilers and Turbines (51%)

P/E

5x FY2014E Earnings

1,230

20

1.3

Other Subsidiaries

2,338

38

2.4

 

Satyam Stake

Mcap

20% holding company discount

142

2

0.1

Other Investments

P/BV

1x FY2014E Book Value, Mcap

2,197

36

2.3

 

Total

95,859

1,553

100

Source: Company, Angel Research

Exhibit 13: Key assumptions (` cr)

 
 

FY2009

FY2010

FY2011

FY2012

FY2013E

FY2014E

 

Order Inflow

51,600

69,572

79,769

70,574

78,048

86,346

Revenue

33,926

37,035

43,905

53,171

59,559

69,089

Order Backlog (Y/E)

70,300

100,239

130,217

145,723

164,411

184,310

OB/Sales (x)

2.1

2.7

3.0

2.7

2.8

2.7

Source: Company, Angel Research

Larsen & Toubro | 4QFY2012 Result Update Exhibit 14: Angel EPS forecast vs. consensus  

Larsen & Toubro | 4QFY2012 Result Update

Exhibit 14: Angel EPS forecast vs. consensus

 

Angel Forecast

Bloomberg Consensus

Variation (%)

FY2012E

70.8

77.9

(9.2)

FY2013E

76.5

85.7

(10.8)

Source: Company, Angel Research

Investment arguments

Best stock to play the Indian infrastructure theme: We believe L&T is best placed to benefit from the gradual recovery in the capex cycle, given its diverse exposure to sectors, strong balance sheet and cash flow generation as compared to its peers, which grapple with issues such as strained cash flow, high leverage and limited net worth and technological capabilities.

Exhibit 15: Recommendation summary Larsen & Toubro | 4QFY2012 Result Update

Exhibit 15: Recommendation summary

Larsen & Toubro | 4QFY2012 Result Update

Company

CMP

TP Rating

 

Top-line (` cr)

 

EPS (`)

 

Adj. P/E

 

OB/

 

FY12E

FY13E

FY14E

CAGR (%) FY12E FY13E FY14E

CAGR (%) FY12E FY13E FY14E Sales(x)

ABL

194

302

Buy

1,522

2,014

2,294

22.7

18.0

28.4

30.8

30.8

10.8

6.9

6.3

4.2

CCCL

15

- Neutral

2,145

2,526

2,792

14.1

(1.1)

1.8

2.8

-

-

8.1

5.2

2.7

HCC

18

- Neutral

3,988

4,239

4,522

6.5

(3.7)

(1.8)

(0.8)

-

-

-

-

3.8

IRB Infra

109

186

Buy

3,131

3,821

4,582

21.0

14.9

15.0

16.9

6.5

7.3

7.3

6.4

-

ITNL

159

265

Buy

5,606

6,619

7,925

18.9

25.6

22.0

26.7

2.1

6.2

7.2

6.0

4.3

IVRCL

45

79

Buy

5,057

5,758

6,860

16.5

2.0

4.7

6.0

72.7

22.3

9.6

7.5

4.4

JP Assoc.

61

104

Buy 13,963

16,017

18,359

14.7

2.9

4.2

5.0

30.9

21.0

14.6

12.2

-

L&T

1,160 1,553

Buy

53,171

59,559

69,089

14.0

64.7

70.8

76.5

8.7

17.9

16.4

15.2

2.7

Madhucon

46

84

Buy

1,952

2,503

2,903

21.9

4.4

5.8

6.5

21.8

10.4

7.9

7.0

3.8

NCC

34

76

Buy

4,946

5,790

7,022

19.1

1.4

3.5

5.4

97.6

24.7

9.8

6.3

4.3

Patel Engg

88

- Neutral

3,573

3,609

3,836

3.6

14.9

14.0

14.5

(1.1)

5.9

6.2

6.0

2.7

Punj Lloyd

44

- Neutral 10,557

11,592

12,993

10.9

2.8

1.8

3.2

7.2

16.0

24.3

13.9

2.6

Sadbhav

135

199

Buy

2,604

2,989

3,314

12.8

9.3

10.2

11.3

10.5

14.6

13.3

12.0

2.7

Simplex In.

207

316

Buy

5,929

6,732

7,902

15.4

19.6

27.2

35.1

33.9

10.6

7.6

5.9

2.9

Source: Company, Angel Research

 

Exhibit 16: SOTP break-up

 

Company

Core Const.

Real Estate

 

Invst. In Subsidiaries

 

Others % to TP

Total

`

% to TP

`

% to TP

`

Road BOT % to TP

`

% to TP

`

`

ABL

128

42

-

-

174

58

-

-

-

-

302

CCCL

20

100

-

-

-

-

-

-

-

-

20

HCC

(5)

(20)

12

50

16

70

-

-

-

-

23

IRB Infra

98

59

-

-

64

39

4

3

-

-

166

ITNL

53

20

-

-

180

68

-

-

33

12

265

IVRCL

54

69

-

-

-

-

25

31

-

-

79

JP Assoc.

34

32

27

26

-

-

-

-

43

42

104

L&T

1,223

79

-

-

-

-

330

21

-

-

1,553

Madhucon

33

39

2

2

50

59

-

-

-

84

NCC

43

57

2

2

10

13

-

-

22

28

76

Patel Engg

55

51

17

16

16

15

-

-

19

18

106

Punj Lloyd

72

100

-

-

-

-

-

-

-

-

72

Sadbhav

102

51

-

-

98

49

-

-

-

-

199

Simplex In.

316

100

-

-

-

-

-

-

-

-

316

Source: Company, Angel Research

Larsen & Toubro | 4QFY2012 Result Update Profit & loss statement (Standalone) Y/E March (

Larsen & Toubro | 4QFY2012 Result Update

Profit & loss statement (Standalone)

Y/E March (` cr)

FY2009 FY2010 FY2011 FY2012 FY2013E

FY2014E

Gross sales

34,045

36,996

43,886

53,100

59,641

69,243

Less: Excise duty

398

321

390

567

637

740

Net Sales

33,647

36,675

43,496

52,533

59,004

68,504

Other operating income

280

360

409

637

555

586

Total operating income

33,926

37,035

43,905

53,171

59,559

69,089

% chg

36.4

9.2

18.6

21.1

12.0

16.0

Total Expenditure

30,094

32,295

38,306

46,888

52,439

61,186

Net Raw Materials

16,798

17,309

21,272

26,072

29,207

34,214

Other Mfg costs

9,434

11,144

12,160

14,948

16,521

19,181

Personnel

1,998

2,379

2,885

3,663

3,540

4,110

Other

1,864

1,463

1,990

2,204

3,170

3,681

EBITDA

3,832

4,739

5,599

6,283

7,120

7,903

% chg

35.6

23.7

18.1

12.2

13.3

11.0

(% of Net Sales)

11.4

12.9

12.9

11.8

12.1

11.5

Depreciation& Amortisation

283

380

562

699

816

969

EBIT

3,550

4,360

5,036

5,583

6,305

6,934

% chg

35.3

22.8

15.5

10.9

12.9

10.0

(% of Net Sales)

10.5

11.9

11.6

10.6

10.7

10.1

Interest & other Charges

350

505

647

666

853

1,004

Other Inc (incl Ass/JV pft)

643

768

1,087

1,338

1,399

1,516

(% of PBT)

16.7

16.6

19.8

21.4

20.4

20.4

Recurring PBT

3,842

4,623

5,475

6,255

6,851

7,447

% chg

28.5

20.3

18.4

14.2

9.5

8.7

Extraordinary Expense/(Inc.)

(871)

(1,394)

(429)

(55)

-

-

PBT (reported)

4,713

6,016

5,904

6,310

6,851

7,447

Tax

1,231

1,641

1,946

1,854

2,013

2,188

(% of PBT)

26.1

27.3

33.0

29.4

29.4

29.4

PAT (reported)

3,482

4,376

3,958

4,456

4,838

5,259

Less: Minority interest (MI)

-

-

-

-

-

-

Prior period items

-

-

-

-

-

-

PAT after MI (reported)

3,482

4,376

3,958

4,456

4,838

5,259

ADJ. PAT (excl. div from Subs)

2,595

2,893

3,342

3,993

4,369

4,720

% chg

32.4

11.5

15.5

19.5

9.4

8.0

(% of Net Sales)

7.7

7.9

7.7

7.6

7.4

6.9

Basic EPS (`) (Reported)

59.2

72.6

65.0

72.8

78.4

85.2

Fully Diluted EPS (`) (Diluted)

42.0

46.9

54.1

64.7

70.8

76.5

% chg

32.4

11.5

15.5

19.5

9.4

8.0

Larsen & Toubro | 4QFY2012 Result Update Balance sheet (Standalone) Y/E March ( ` cr)

Larsen & Toubro | 4QFY2012 Result Update

Balance sheet (Standalone)

Y/E March (` cr)

FY2009

FY2010

FY2011

FY2012E

FY2013E

FY2014E

SOURCES OF FUNDS Equity Share Capital Preference Capital Reserves& Surplus Shareholder’s Funds Minority Interest Total Loans Deferred Tax Liability

118

121

122

122

123

123

-

-

-

-

-

-

12,343

18,191

21,725

25,092

28,788

32,847

12,460

18,312

21,846

25,215

28,911

32,971

-

-

-

-

-

-

6,556

6,801

7,161

8,381

10,276

12,282

48

77

263

263

263

263

Total Liabilities

19,065

25,190

29,271

33,859

39,450

45,516

APPLICATION OF FUNDS Gross Block Less: Acc. Depreciation Net Block Capital Work-in-Progress Goodwill Investments Current Assets Cash Loans & Advances Other Current liabilities Net Current Assets Mis. Exp. not written off

5,575

7,236

8,897

10,241

12,144

14,058

1,418

1,728

2,224

2,923

3,739

4,708

4,157

5,508

6,673

7,318

8,405

9,350

1,038

858

785

942

1,130

1,356

-

-

-

-

-

-

8,264

13,705

14,685

15,685

17,185

18,685

23,448

26,362

34,951

42,819

49,408

58,834

775

1,432

1,730

2,160

2,135

3,361

6,791

5,997

8,189

10,197

12,238

14,196

15,882

18,932

25,032

30,462

35,035

41,276

17,842

21,243

27,823

32,905

36,679

42,709

5,606