L&T Q3 Preview: Strong EPC performance to boost revenue and PAT growth

Infrastructure major Larsen and Toubro (L&T) is likely to report solid growth in earnings in the third quarter, led by the core engineering and construction segments.

Revenue from operations is likely to jump 20% year-on-year (YoY), according to an average estimate of four brokerages, while profit after tax (PAT) is seen rising 24% YoY.

Analysts expect a 24% YoY growth in core EPC revenues as the weakness in domestic execution is more than getting compensated by strength in overseas execution.


Key monitorables include domestic order pipeline, margin performance, as well as working capital cycle. Notably, the company has bagged thermal and defence orders in 3QFY25, allaying concerns about domestic ordering.

Here's what to expect from L&T Q3:

Kotak Equities

Half of core E&C revenues for L&T comes from the centre/state/CPSE customers. “We expect execution growth to moderate in 4Q to 15%, as it gets aligned with the low-teens growth in order backlog, as of end-2QFY25,” stated the brokerage.

Nuvama

While government capex initiatives and ME hydrocarbon ordering show strong momentum, private capex is yet to show its best. FY26 strategic plan is to focus on making subsidiaries self-sustainable, strong presence in green energy (hydrogen, battery storage etc.) and non-core exits.

With robust order inflow growth, execution completion of legacy projects, refinancing of Hyderbad metro etc., margins may see ramping up but at a slower pace. The company retained FY25 guidance of 10%/15% OI/sales growth with 8.2% core OPMs (bottomed out). Large OI is likely in H2 across Middle East and India.

Motilal Oswal

It expects consolidated revenue growth of 20% YoY, led by 24% YoY revenue growth for Core E&C. The core E&C EBITDA margin is expected at 8.1%, up 40bp YoY.

“We would look out for execution ramp-ups in Saudi projects and trends in the GCC order pipeline,” it maintained.

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