Group Performance for the year ended March 31, 2018

Consolidated Results
PAT increases by 22%

Mumbai, May 28, 2018: Larsen & Toubro recorded Consolidated Gross Revenue of ₹119,862 crore for the year ended March 31, 2018, registering a y-o-y growth of 9%. The International revenue during the year at ₹39,699 crore constituted 33% of the total revenue.

The Consolidated Gross Revenue in the quarter January to March 2018 totalled ₹40,678 crore recording an increase of 10% on a y-o-y basis.

Consolidated Profit After Tax (PAT) for the year ended March 31, 2018 at ₹7,370 crore registered a growth of 22% y-o-y. The overall PAT for the quarter January to March 2018 stood at ₹3,167 crore as compared to ₹3,025 crore recorded for the corresponding quarter of the previous year.

The Board of Directors has recommended for the approval of shareholders, a Dividend of ₹16 per share.

The Company successfully won fresh orders worth ₹152,908 crore at the group level during the year ended March 31, 2018 registering a growth of 7% over the previous year. The International orders during the year at ₹35,853 crore constituted 23% of the total order inflow. Order wins in Infrastructure and Hydrocarbon segments were the major contributors to the order flow during the year.

The order intake for the quarter ended March 31, 2018 at ₹49,557 crore grew by 5% y-o-y. International order inflow during the quarter at ₹8,678 crore constituted 18% of the order inflow for the quarter.

Consolidated Order Book of the group stood at ₹263,107 crore as at March 31, 2018, with international Order Book constituting 24% of the total Order Book.

Infrastructure Segment

Infrastructure segment secured fresh orders of ₹87,277 crore, during the year ended March 31, 2018, registering a growth of 11%. The order awards reflect pick up of domestic investment momentum in second half of the year. International orders at ₹14,298 crore constituted 16% of the total order inflow of the segment during the year.

During the quarter January-March 2018, the Segment recorded order inflow of ₹33,455 crore registering a growth of 27% over the corresponding quarter of the previous year.

The Order Book of the Segment stood at ₹195,419 crore as at March 31, 2018.

Infrastructure Segment achieved Customer Revenue of ₹59,083 crore for the year ended March 31, 2018 registering a y-o-y growth of 12% with pick up of execution momentum in the later part of the year. International revenue constituted 29% of the total customer revenue of the segment during the year. The execution pace peaked in the quarter January to March 2018 with the Customer Revenue at ₹22,946 crore recording a y-o-y growth of 15%.

The EBITDA margin of the segment during the year ended March 31, 2018 was marginally lower at 10.0% compared to previous year, with cost pressures in a few international projects.

Power Segment

Power Segment secured fresh orders of ₹2,414 crore for the year ended March 31, 2018 lower by 16% y-o-y, with international orders constituting 86% of the total order inflow. On the domestic front, the sector continues to witness subdued ordering activity and aggressive competition. Order Inflow of the Segment during the quarter ended March 31, 2018 stood at ₹182 crore

The Order Book of the Segment stood at ₹9,357 crore as at March 31, 2018 recording a y-o-y decline of 32%.

Power Segment recorded customer revenue of ₹6,201 crore during the year ended March 31, 2018, registering a y-o-y decrease of 11% on declining order book. International revenue constituted 24% of the total customer revenue of the segment during the year. For the quarter January-March 2018, the Customer Revenue was at ₹1,502 crore, recording y-o-y decline of 18%.

The segment EBITDA margin for the year ended March 31, 2018 was at 3.4%, marginally lower compared to 3.5% recorded in previous year.

Heavy Engineering Segment

Heavy Engineering Segment secured fresh orders valued ₹5,848 crore crore during the year ended March 31, 2018. International orders constituted 17% of the total order inflow of the segment during the year. During the quarter January-March 2018, the Segment recorded order inflow of ₹2,097 crore.

The Order Book of the Segment increased by 13% on a y-o-y and stood at ₹13,523 crore as at March 31, 2018.

Heavy Engineering Segment recorded Customer Revenue of ₹3,845 crore registering a y-o-y growth of 22% over the previous year, with pick up of execution momentum in defence orders. International sales constituted 23% of the total customer revenue of the segment. The Customer Revenue during the quarter January-March 2018 stood at ₹1148 crore recording a y-o-y growth of 23%.

The EBITDA margin of the segment declined to 17.1% for the year ended March 31, 2018 vis--vis the margin of 20.0% in the previous year, reflecting the stage of execution of the projects in the order book portfolio.

Electrical & Automation (E&A) Segment

E&A Segment recorded Customer Revenue of ₹5,209 crore during the year ended March 31, 2018, registering a growth of 5% y-o-y. On a like-to-like basis, revenues adjusted for Excise Duty grew by 11%. International Revenue constituted 28% of the total customer revenue of the segment for the year ended March 31, 2018. The Customer Revenue during the quarter January-March 2018 stood at ₹1,546 crore recording a marginal decrease y-o-y.

The EBITDA Margin of the E&A Segment strengthened to 16.0% for the year vis--vis 15.1% for the previous year on the back of streamlined execution in the automation business.

Hydrocarbon Segment

Hydrocarbon Segment secured fresh orders valued ₹15,811 crore, during the year ended March 31, 2018, a decline of 15% compared to previous year, with reduction in international orders. International order inflow constituted 38% of the total order inflow of the segment. The order inflow for the quarter January-March 2018 stood at ₹2,976 crore vis--vis ₹7,276 crore recorded in the corresponding quarter of the previous year.

The Order Book of the Segment stood at ₹26,590 crore as at March 31, 2018, registering a y-o-y growth of 7%.

Hydrocarbon Segment recorded Customer Revenue of ₹11,736 crore during the year ended March 31, 2018, registering a y-o-y growth of 22% over the previous year, with substantial growth in opening order book. With receipt of large value international orders in previous year, the International sales constituted 58% of the total customer revenue of the segment for the year ended March 31, 2018. The Customer Revenue during the quarter January-March 2018 stood at ₹3,548 crore recording a y-o-y growth of 38%.

The segment recorded improvement in the EBITDA Margin to 7.7% for the year ended March 31, 2018 vis--vis 6.8% in the previous year, with close out of legacy international projects and improved operational efficiencies.

IT & Technology Services (IT&TS) Segment

IT & Technology Services Segment achieved Customer Revenue of ₹11,188 crore during the year ended March 31, 2018, registering y-o-y growth of 15%. International sales constituted 93% of the total customer revenue of the segment for the year ended March 31, 2018. The Customer Revenue during the quarter January-March 2018 stood at ₹3,075 crore recording a y-o-y growth of 24%.

The EBITDA Margin of the IT&TS Segment was 21.4% for the year ended March 31, 2018 vis--vis 21.2% for the previous year.

Financial Services Segment

Financial Services Segment recorded Customer Revenue of ₹10,064 crore during the year ended March 31, 2018, registering a y-o-y growth of 18%, driven by growth in loan assets and disbursements in the focus areas of wholesale, real estate, micro loans and farm portfolio.

The operating margin of the Financial Services Segment for the year ended March 31, 2018 increased to 14.8% from previous year at 10.1% on the back of higher fee income and cost control measures.

Developmental Projects Segment

Developmental Projects Segment registered Customer Revenue of ₹4,294 crore during the year ended March 31, 2018, recording a 7% increase over the previous year, with partial commissioning of the Companyߴs Metro Rail concession in Hyderabad, being implemented through a subsidiary. The increase also represents resumption of Revenue Recognition relating to certain costs hitherto disallowed by the customer, but allowed by Supreme Court in favour of Nabha Power Ltd, a subsidiary company.

The EBITDA Margin of the Developmental Projects Segment for the year ended March 31, 2018 improved to 6.3% vis--vis 2.3% earned during the previous year. The improvement is the outcome of the favourable Supreme Court judgement in the case of Nabha Power Limited.

❝Others❞ Segment

❝Others❞ segment comprises Metallurgical & Material Handling Systems, Realty, Shipbuilding, Construction & Mining Equipment and Industrial Machinery & Product businesses.

Customer Revenue of ❝Others❞ segment during the year ended March 31, 2018 at ₹8,242 crore registered a decline of 19% over the previous year, mainly due to depleted opening order books in Valves, Metallurgical & Material Handling and Realty businesses. International sales constituted 17% of the total customer revenue of the segment.

During the year ended March 31, 2018, the segment EBITDA margin stood at 17.3% as compared to margin of 10.9% in the previous year on the back of an asset monetisation transaction in Realty business.

Outlook

Domestic reforms such as GST, RERA and the Insolvency & Bankruptcy Code have led to disruptions in the year gone by, though these are expected to lead to sustainable long term growth. These reform measures along with increased flow of funds from multilateral Institutions aided by supportive policies such as pursuance of ߵMake in Indiaߴ initiative, focus on infrastructure buildout, etc. are likely to improve the investment climate in the country. With tax revenues estimated to show buoyancy through nominal GDP growth and widening of the tax base, budgetary allocations for infrastructure are scheduled to increase although the short term focus of the Government could well be on development of rural India through social welfare schemes. Revival of stressed business through the IBC is targeted at progressive resolution of the ❝twin balance sheet❞ problems and is the first step in facilitating increased credit lines to kick start private sector capex.

On the global front, oil price dynamics and geo-political developments have led to investment uncertainty in countries that were hitherto considered as growth geographies. Hardening of oil prices, fluctuation in commodity prices and currency movements have infused volatility in the economies and businesses across the board. Meanwhile, some countries have started seeing opportunities in this environment for their economic growth and this bodes well for global development. Recent upswing in oil prices could also incentivise infrastructure and hydrocarbon capex in the Middle East region.

In the backdrop of this economic environment, the Company expects to continue its planned trajectory of profitable and steady growth which, along with its many value enhancing measures, is aimed at improving shareholder returns on a sustainable basis.

Background

Larsen & Toubro is an Indian multinational engaged in technology, engineering, construction, manufacturing and financial services with over USD 17 billion in revenue. It operates in over 30 countries worldwide. A strong, customer-focused approach and the constant quest for top-class quality have enabled L&T to attain and sustain leadership in its major lines of business for over seven decades.

STATEMENT OF CONSOLIDATED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2018

Consolidated Audited segment-wise Revenue, Result, Total assets and Total liabilities in terms of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended: