Larsen and Toubro (L&T), a leading infrastructure conglomerate, has reported a 5% increase in its consolidated profit after tax (PAT) for the second quarter of the fiscal year 2024-25. The profit rose to ₹3,395 crore, up from ₹3,223 crore in the same period last year, according to a regulatory filing by the company. This growth is attributed to a surge in the company's income during the quarter under review.

The company's consolidated income witnessed a significant rise, reaching ₹62,655.85 crore, a substantial increase from ₹52,157.02 crore in the corresponding period of the previous year. However, the company's expenses also saw an uptick during the September quarter, escalating to ₹57,100.76 crore from ₹47,165.95 crore a year ago.

Despite the global macroeconomic volatility, L&T has managed to deliver a robust financial performance. The company's projects and manufacturing businesses have continued to perform well, contributing to the strong financial results.

L&T's Record Order Book and International Performance

The company's Chairman and Managing Director, S N Subrahmanyan, highlighted the company's record order book of over ₹5 lakh crore as a testament to its proven competence in the domains of engineering, construction, manufacturing, and project management. L&T, a $27 billion Indian multinational, operates across multiple geographies, engaging in engineering, procurement, and construction (EPC) projects, hi-tech manufacturing, and services.

The company's robust order inflow of ₹80,045 crore in the second quarter of the fiscal year 2024-25 signifies strong revenue potential. Interestingly, 63% of these orders, amounting to nearly ₹50,000 crore, came from international markets. The company's consolidated revenue also saw a 21% year-on-year jump, reaching ₹61,555 crore, compared to ₹51,024 crore in the previous year's corresponding quarter.

International revenues, constituting 52% of the total revenues, stood at ₹32,057 crore, reflecting a robust international P&M order book. On the operational front, the company's EBITDA for the quarter jumped by 13% year-on-year to ₹6,362 crore, compared to ₹5,632 crore in the same quarter of the previous year.

Impact of Rising Operational Costs

However, the EBITDA margins declined by 70 basis points to 10.3%, primarily due to the high cost of raw materials and construction materials consumed. Construction materials, which form a significant part of the total expenditure, surged by 45% year-on-year to ₹17,032 crore.

The company's net profit for the quarter stood at ₹3,395 crore, marking a 5.5% year-on-year growth. The overall tax expense for the quarter also saw a 28% year-on-year increase, reaching ₹1,442 crore.

In the past, L&T has demonstrated a consistent track record of strong financial performance despite challenging global economic conditions. This trend seems to be continuing, as evidenced by the company's latest quarterly results. The company's ability to secure a robust order inflow, particularly from international markets, and maintain a strong order book, underscores its resilience and operational efficiency.