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L&T Records a 45% Surge in Q2 Profit, Reaching Rs. 3,223 Crore

L&T Financial Triumph in Q2 2023–24

L&T has report­ed impres­sive finan­cial results for Q2 2023–24, sur­pass­ing mar­ket expec­ta­tions. Net prof­it increased by 45% year-on-year to reach Rs 3,223 crore, while con­sol­i­dat­ed rev­enue saw a 19% rise to Rs 51,024 crore.

EBITDA Margin Exceeds Expectations

L&T exceed­ed EBITDA mar­gin expec­ta­tions with a report­ed 11% mar­gin, out­per­form­ing the antic­i­pat­ed 10.5%. How­ev­er, it expe­ri­enced a 40 basis point decline in EBITDA mar­gin com­pared to the pre­vi­ous year due to aggres­sive pric­ing strate­gies.

Positive Outlook for Operating Margins

The com­pa­ny fore­sees improv­ing oper­at­ing mar­gins in the com­ing months, dri­ven by the com­ple­tion of projects secured at com­pet­i­tive prices in 2022–23 and the ini­ti­a­tion of new orders.

Reversal in Infrastructure Projects Operating Margins

L&T man­aged to reverse its trend of declin­ing oper­at­ing mar­gins in its infra­struc­ture projects seg­ment, achiev­ing a 5.4% oper­at­ing mar­gin in Q2FY24 com­pared to 5.1% in Q1FY24. How­ev­er, YoY, the seg­men­t’s oper­at­ing mar­gin declined by 120 basis points.

Divestment Plans and Metro Performance

L&T has no sig­nif­i­cant updates on divest­ment plans. The com­pa­ny used a soft loan to repay the Hyder­abad metro project debt, and the metro’s dai­ly rid­er­ship increased to approx­i­mate­ly 5.5 lakh pas­sen­gers in Q2 2023 from 5 lakh in the pre­vi­ous quar­ter.

Venturing into Semiconductor Design

L&T is ven­tur­ing into the field of fab­less semi­con­duc­tor chip design by estab­lish­ing a whol­ly-owned sub­sidiary with an invest­ment of up to Rs 830 crore. The focus will be on chip design to cre­ate patent­ed prod­ucts, avoid­ing semi­con­duc­tor man­u­fac­tur­ing due to glob­al com­pe­ti­tion.

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