L&T Q1 Orders Miss Estimates, CFO Blames Election Slowdown

Larsen & Toubro’s first-quarter order inflows fell short of analyst estimates, a sign that India’s capital expenditure cycle is cooling even as the government pushes infrastructure spending.

The company reported consolidated order inflows of ₹67,300 crore for the quarter ended June 30, missing the consensus estimate of ₹85,000 crore compiled by Bloomberg. The miss was concentrated in the domestic infrastructure segment, where new orders fell 14% year-on-year to ₹39,100 crore. International orders, at ₹28,200 crore, provided a partial offset.

CFO Parameswaran Ramakrishnan attributed the shortfall to a slower pace of award finalisations in the first quarter, a pattern he said was typical of an election year. “The first quarter is always slow. The awards pick up from the second quarter onwards,” he said during the earnings call.

The company maintained its full-year order inflow guidance of 10-15% growth, implying a sharp acceleration in the remaining three quarters. Ramakrishnan said the pipeline of large projects – those valued at over ₹2,500 crore – stood at roughly ₹1.5 lakh crore, with several expected to convert in the second half of the fiscal year.

Revenue for the quarter rose 15% to ₹61,543 crore, in line with estimates. Earnings before interest, tax, depreciation and amortisation (EBITDA) margin held steady at 11.4%, within the company’s guided range of 11-12%. Net profit attributable to shareholders was ₹2,759 crore, up 12% year-on-year and marginally ahead of consensus.

The order book at the end of the quarter stood at ₹5.03 lakh crore, giving the company roughly 3.2 times trailing twelve-month revenue. The international proportion of the order book rose to 34%, up from 32% a year ago, reflecting L&T’s push into Middle East markets.