New Delhi: Larsen & Toubro (L&T) reported over 1 per cent decline in net profit for the third quarter (Q3) of the financial year 2024-25 at Rs 3,358.84 crore, excluding non-controlling interests, from Rs 3,395.29 crore reported in the previous quarter (Q2 FY25). L&T’s revenue rose by 17 per cent at Rs 64,668 crore in Q3FY25, up from Rs 55,128 crore in Q3FY24, according to its stock exchange filing. However, despite this growth, the company fell short of market expectations. Analysts attributed the decline to a contraction in L&T’s operating margins.
The company’s EBITDA margin declined by 70 basis points to 9.7 per cent in Q3FY25 from 10.4 per cent a year ago. This decline was primarily due to a sharp rise in costs. The cost of raw materials and components surged by 50 per cent, while expenses for construction materials went up by 16 per cent. L&T’s infrastructure projects segment had been facing margin pressure for several quarters.
The company had secured infrastructure contracts at highly competitive prices following the COVID-19 pandemic and the geopolitical crisis caused by the Russia-Ukraine conflict in 2022-23. The Energy Projects segment also witnessed a decline in operating margins. The segment’s EBITDA margin fell to 8.3 per cent in Q3FY25, down from 9.7 per cent in the same period last year.
Meanwhile, L&T’s IT & Technology Services segment reported a revenue increase of 7.7 per cent at Rs 12,061 crore for the December quarter. Despite the growth in revenue, profit from this segment fell 7 per cent to Rs 1,833.8 crore.
The EBITDA margin for the segment dropped to 18.7 per cent, compared to 20.7 per cent a year ago. L&T remains optimistic about future performance in this segment, expecting stronger revenue growth due to recent deal wins and positive sentiment towards discretionary spending.
International billing made up 93 per cent of the total customer revenue in this segment. The company’s consolidated order book stood at Rs 5,64,223 crore at the end of December 2024, with 42 per cent of it coming from international markets. This was a significant jump from Rs 4,69,807 crore recorded in the previous year.