L&T 2023-24 Annual Report Analysis

Thu, 13 Jun

L&T has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during FY23-24.

L&T Income Statement Analysis

• Operating income during the year rose 20.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 14.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 12.7% in FY24 as against 13.4% in FY23.
• Depreciation charges increased by 5.1% and finance costs increased by 0.7% YoY, respectively.
• Other income grew by 1.4% YoY.
• Net profit for the year grew by 23.3% YoY.
• Net profit margins during the year grew from 6.9% in FY23 to 7.0% in FY24.

L&T Income Statement 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Net Sales	Rs m	1,833,407	2,211,129	20.6%
Other income	Rs m	58,215	59,040	1.4%
Total Revenues	Rs m	1,891,622	2,270,169	20.0%
Gross profit	Rs m	245,398	281,174	14.6%
Depreciation	Rs m	35,023	36,823	5.1%
Interest	Rs m	97,501	98,219	0.7%
Profit before tax	Rs m	171,090	205,171	19.9%
Tax	Rs m	44,842	49,474	10.3%
Profit after tax	Rs m	126,249	155,697	23.3%
Gross profit margin	%	13.4	12.7
Effective tax rate	%	26.2	24.1
Net profit margin	%	6.9	7.0

Must See: These Segments are Witnessing Incredible Growth with Modi's Push

L&T Balance Sheet Analysis

• The company's current liabilities during FY24 stood at Rs 1,766 billion as compared to Rs 1,621 billion in FY23, thereby witnessing an increase of 9.0%.
• Long-term debt down at Rs 565 billion as compared to Rs 612 billion during FY23, a fall of 7.7%.
• Current assets fell 2% and stood at Rs 2,171 billion, while fixed assets rose 13% and stood at Rs 1,177 billion in FY24.
• Overall, the total assets and liabilities for FY24 stood at Rs 3,358 billion as against Rs 3,264 billion during FY23, thereby witnessing a growth of 3%.

L&T Balance Sheet as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	888,589	858,087	-3.4
Current Liabilities	Rs m	1,620,660	1,766,007	9.0
Long-term Debt	Rs m	612,177	565,070	-7.7
Total Liabilities	Rs m	3,263,675	3,357,635	2.9
Current assets	Rs m	2,212,155	2,170,745	-1.9
Fixed Assets	Rs m	1,041,632	1,176,837	13.0
Total Assets	Rs m	3,263,675	3,357,635	2.9

L&T Cash Flow Statement Analysis

• L&T's cash flow from operating activities (CFO) during FY24 stood at Rs 183 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY24 stood at Rs 22 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY24 stood at Rs -254 billion on a YoY basis.
• Overall, net cash flows for the company during FY24 stood at Rs -50 billion from the Rs 32 billion net cash flows seen during FY23.

L&T Cash Flow Statement 2023-24

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-23	Mar-24
Cash Flow from Operating Activities	Rs m	227,770	182,663	-19.8%
Cash Flow from Investing Activities	Rs m	-83,117	21,630	-
Cash Flow from Financing Activities	Rs m	-115,725	-254,134	-
Net Cash Flow	Rs m	31,565	-49,682	-

Current Valuations for L&T

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 113.3, an improvement from the EPS of Rs 89.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 3,696.0, stands at 32.6 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 5.9 times, while the price to sales ratio stands at 2.3 times.
• The company's price to cash flow (P/CF) ratio stood at 21.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Sales per share (Unadj.)	Rs	1,304.5	1,608.5
TTM Earnings per share	Rs	89.8	113.3
Diluted earnings per share	Rs	91.8	113.3
Price to Cash Flow	x	18.5	21.3
TTM P/E ratio	x	23.6	32.6
Price / Book Value ratio	x	3.0	4.8
Market Cap	Rs m	2,638,160	4,101,702
Dividends per share (Unadj.)	Rs	24.0	34.0

Ratio Analysis for L&T

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 1.2x during FY24, from 1.4x during FY23. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio improved and stood at 3.1x during FY24, from 2.8x during FY23. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company improved and stood at 18.1% during FY24, from 14.2% during FY24. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 21.3% during FY24, from 17.9% during FY23. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company improved and stood at 7.6% during FY24, from 6.9% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Current ratio	x	1.4	1.2
Debtors’ Days	Days	9	8
Interest coverage	x	2.8	3.1
Debt to equity ratio	x	0.7	0.7
Return on assets	%	6.9	7.6
Return on equity	%	14.2	18.1
Return on capital employed	%	17.9	21.3

To see how L&T has performed over the last 5 years, please visit here.

L&T Share Price Performance

Over the last one year, L&T share price has moved up from Rs 2,354.8 to Rs 3,696.0, registering a gain of Rs 1,341.2 or around 57.0%.

Meanwhile, the S&P BSE CAPITAL GOODS Index is trading at Rs 71,289.3 (up 0.9%). Over the last one year it has moved up from 39,514.1 to 71,289.3, a gain of 31,775 points (up 80.4%).

Overall, the S&P BSE SENSEX is up 22.5% over the year.

(To know more, check out historical annual results for L&T and quarterly results for L&T)