Analyst Meet / AGM - Analyst Meet
Expects 15% growth in order book and in net sales in FY'16
The company held its analyst meet on 30th May 2015 and was addressed by key management
Key Highlights
L&T reported an 8% growth in net sales in FY'15 to Rs 92004.58 crore. OPM was lower by about 30 bps to 12.3%, restricting the OP growth to 6% to Rs 11335.61 crore. PAT after EO adjustments and MI income, was lower by about 3% to Rs 4764.82 crore.
Company recorded an order inflow of Rs 155400 crore at consolidated level up by 22% YoY in FY'15. For Q4 FY'15, order intake was up by 39% to Rs 47600 crore. 74% of the total orders came from domestic market while rests are from exports.
Consolidated order book stood at Rs 232700 crore, up by 28% YoY. International order book forms about 25% of total order book.
Government policy initiatives are positive and in the right direction though execution continues to remain a challenge due to legacy culture and hence whatever changes that one expects is happening very slowly.
The company has shifted its focus to domestic market as there are many opportunities across infrastructure, roads, ports, railways, nuclear, power, metro, fertilizer, defense, LNG etc in FY'16.
The company received all the 8 EPC road projects that were on bid in FY'15. The company expects 4 more such projects very soon. As per the management, the company will bid only for EPC related road projects and not BOT projects where owning of asset remains with the company, given the lack of clarity on these projects.
The company is L1 in 2 fertilizer projects of Rs 2000 crore each that were expected long back.
As per the management the worst is over for Hydrocarbon and whatever losses it had to book, has been booked in FY'16. International competition has increased in hydrocarbon segment. Total losses booked in the sector stood at around Rs 1100 crore.
As per the management, the good thing is that the infrastructure projects in Middle East are not impacted or affected due to change in labour laws and visa issues. There was a delay but things are already getting back in place.
Realty projects are doing well for the company. Already the company generated about Rs 450 crore of PAT in FY'15. The company to launch 4 more new projects in FY'16 on surplus land in Mumbai, Banglore and Chennai.
The company has invested about Rs 5600 crore till now in Hyderabad Metro Project, with a monthly billing of around Rs 250 crore. The company is working on revised plan and will book the revenue of Phase 1 which will be completed in FY'16.
Management expects nuclear and defense orders to come in only in FY'17 and execution to happen in FY'18. The company has already invested in Nuclear and Defense and has ready capacity to tap the future orders.
Heavy forging and Ship building businesses are still in losses due to lower utilization and lower orders. The company expects the division to turnaround only in FY'18.
IT and finance divisions both did well in FY'15. Management expects the IT arm to list in FY'17.
There was a total forex loss of about Rs 130 crore in FY'15.
At consolidated level, interest costs was lower by around 9% YoY, due to refinancing, lower capex and improvement in working capital cycle.
For FY'16 management expects the company to grow by about 15% in net sales and in order book. OPM also to improve by about 100 bps on YoY basis. The growth will be back ended in H2 FY'16.
Capex for FY'16 to be around Rs 1000 crore.
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