For the quarter, sales from defense engg stood at Rs 1108.39 crore, up by 16% YoY and accounted for 2% of total sales. PBIT from the same stood at Rs 170.20 crore up by 95% with PBIT margin of 17%. For the quarter, sales from the Electrical Automation segment stood at Rs 1715.51 crore up by 4% YoY and accounted for 5% of sales. PBIT from the same was up by...

FY19 was a good year for L&T, barring the moderation in Infra margins. FY20E is expected to be a better year, with (1) A new Government in place, (2) Reduction in subsidiaries' losses, (3) Mix change towards high margins services business, (4) A much awaited pickup in private capex, and (5) Strong cash generation. L&T remains a well diversified play on investment recovery. We recommend BUY. Key risks (1) Delays in private capex recovery, (2) Slowdown in government infrastructure spend, (3) Higher raw material prices, and (4) NWC deterioration. We recommend a BUY on Larsen & Toubro (LT) with SoTP of Rs 1,794/sh. Reduction in subsidiaries losses, majorly provided transportation project overruns, order pick up in Domestic/International markets and strong cash flow make L&T; an anchor play on infra investment and capex recovery. Higher services share in the mix will improve RoEs further. Working capital is at optimal levels. A tight lid on asset capex will only help further re-rating.

Positive surprise on order inflows front, strong bid pipeline L&T; positively surprised on order inflow front by delivering 16% order inflow growth to | 176800 crore (beating its guidance of 10-12%). For Q4FY19, L&T; registered strong order inflows worth | 56538 crore, up 14% YoY at the group level, predominantly led by strong tendering activities in international markets. Key drivers for order inflows were the infrastructure (| 31033 crore) and hydrocarbon segments (| 12586 crore). L&T;'s order backlog was at | 293427 crore, up 12% YoY. The expected strong bid pipeline of | 9 -10...

RoE at the end of FY19 came in at 15.3% compared to 14.1% in FY18. business model with robust order book, diverse skill sets, strong execution capabilities and increased focus on improving return ratios by exiting noncore assets. L&T; delivered good set of numbers in 4QFY19 with PAT of Rs38bn (PLe Rs34 bn) up 14% YoY. Revenues were up 11.1% YoY led by growth in Infrastructure, Hydrocarbon (mainly international) and Services businesses. EBITDA margins came in at 12.5%, down 80bps YoY. Margin miss was mainly due to upfront booking of cost and lower revenue booking due to projects not achieving threshold. The overall order inflow for FY19 was up...

Inline Q4; upbeat FY20 guidance; Maintain Buy Q4 was an inline quarter and the drop in infra margins were due project mix. It has given an upbeat guidance for FY20 in terms of inflows, revenues and margins, which should help it continue its upwards RoE trajectory. Remains the best proxy for the Indian infrastructure story. We...

be lumpy due to new accounting standard IND AS 115). Superior cash flow generation led to higher other income. Thus, adj. PAT grew 8% to INR34.2b and was mere 2% below our expectation. Exceeds FY19 revenue/order inflow guidance; adj. core E&C; margin flat: Consol. revenue grew 18% YoY in FY19, surpassing the higher end of the guided band of 12-15%. Order inflows (OI) also surprised with 16% growth, led by a strong increase in high-ticket-size orders (>INR25b ticket-size order inflows were at INR400b/23% of OI v/s INR150b/10% of OI in FY18)....

Strong order inflow results in healthy order backlog: During Q4FY2019, order inflow was strong and better than expectation. Order inflow for the quarter came in at Rs. 56,538 crore (up 14% y-o-y), beating the company's guidance of 12% y-o-y growth, of which Rs. 17,680 crore constituted international order, which doubled from last year, largely contributed by...

Larsen & Toubro Infotech's (LTI) Q4FY19 result was in-line with our forecast 1) revenue growth of 1.9% QoQ in CC vs. our forecast of 2.8% QoQ, 2) EBIT margin of 17.7% , -146bps QoQ vs. our forecast of -126bps QoQ. Revenue growth would have been higher but for the expected weakness in revenue from the top client. EPS of Rs21.9, +0.9%/+30% QoQ/YoY was in-line with our forecast. Digital solutions (37.9% of revenue) saw another quarter of strong growth +10.7%/+41.3% QoQ/YoY in US$. LTI now has 66 Fortune 500 clients, +3 QoQ. LTI has also secured 2 large deals in Q4 with net-new TCV of US$100 mn+....

NIIT Tech delivered a soft revenue growth of 2.3% QoQ (Ple: 3.5%, Cons.: Change in Estimates | Target | Reco 3.6%) due to impact of GIS business. EBITDA margin was impacted by one off charge of 50bps related to FBT & legal expenses & adjusted margins are...

We believe Barings can help NIIT Tech in improving its capital allocation (NIIT Tech dividend payout ~40% in FY18). We see no major change in deal wins and revenue momentum, but margin levers are stretched, leaving limited room for upgrade. Barings have earlier acquired Hexaware at inexpensive valuations(10.2x) & then then they improved its capital allocation, offered access to portfolio companies, revenue growth accelerated which helped in re-rating the P/E of Hexaware. We expect 14.9% & 17.5% USD revenue & EPS CAGR for FY19E-FY21E respectively & value NIIT Tech at 17x Mar-21 earnings...

On a TTM basis, digital witnessed average growth of 40% YoY ahead of LTI's growth of 21% YoY indicating growing digital capability of the company. Even on a CQGR basis, digital revenue (in dollar terms) grew at a CQGR of 9.7% vs. the company's growth of 4.1% in the last 11 quarters. Going forward, based on global spend in digital technologies, we expect Indian IT companies to witness at least 25% growth in digital revenues. LTI with its faster adoption, strong execution capabilities, could be a major beneficiary of rising digital proportion ensuring healthy profitability over the coming...

L&T; makes formal move to acquire Mindtree L&T;, the parent of L&T; Infotech (LTI), has announced its intent to acquire ~66% stake in Mindtree (MTCL) as top shareholder VG Siddhartha looks to monetise his stake. We expect the recent correction in LTI (rated BUY, trading at 17.6x/15.1x FY20E/ FY21E P/E) to reverse as its parent has indicated plans to run MTCL as an independent entity. In our view, distractions at MTCL as the promoters tussle with L&T; over leadership control can impair operating performance, though we don't...

It has earmarked an amount of INR107b for this acquisition, valuing MTCL at INR162b (+5% v/s current market cap of INR155b) or INR980/share. However, the promoters of MTCL (13.3% stake) may look to resist the hostile takeover by engaging with other shareholders, and hence, it could be a long-drawn process, in our view. Moreover, this is better utilization of its strong cash balance, especially in light of the rejection of the INR90b share buyback by the SEBI. Even though LT is still engaged with the SEBI for its planned share buyback, the MTCL acquisition lowers the chances of a buyback now, in our view. MTCLs acquisition raises a few questions on the capital allocation policy, especially given that LT has been on track to meet its RoE guidance of 18% by FY21 and divesting its non-core assets.

ICICI Securities Ltd | Retail Equity Research Larsen & Toubro (L&T;) has announced a three part all-cash deal to acquire MindTree Ltd. Firstly, L&T; has entered into a definitive share purchase agreement with VG Siddhartha and his related entities viz. Coffee Day Trading and Coffee Day Enterprises to acquire 20.32% in MindTree Ltd at | 980/ share aggregating to | 3269 crore. The offer...

Larsen & Toubro (L&T;) reported a robust Q3FY19 performance, well above our expectations on the revenue, PAT and order inflow front. Standalone revenues for the quarter grew 26.1% YoY to | 22343 crore (vs. our estimate of | 20116.4 crore). On a consolidated basis, revenues grew 24% to | 35709 crore. On a standalone basis, the infrastructure segment delivered a strong performance with revenue growth of 22.6% to | 17291.8 crore on a YoY basis For Q3FY19, L&T; registered strong order inflows worth | 42233 crore...

Larsen & Toubro (L&T;) Q3 results beat Street estimates. L&T; reported a 24% growth in consolidated net sales in Dec 18 quarter to Rs 35708.87 crore. OPM was up by 30 bps to 11.2% due to lower raw material costs and higher operating...

25 January 2019 Sales increased 24% YoY to INR357b, ahead of our estimate of INR323b, driven by Hydrocarbon (+22% YoY), Infrastructure (+24% YoY), IT (+29% YoY) and Finance (+20% YoY) segments. EBITDA increased 27% YoY to INR40b was driven by the Others and IT/TS segments. We highlight that (a) Infrastructure segment includes INR4b of provisions relating to time and cost overruns and (b) Others segment had INR5.5b of sales and profit relating to the sale of a commercial tower in 3QFY19. PAT increased 37% YoY to INR20.4b, ahead of our estimate of INR18b. by 37% YoY, driven by Infrastructure (+42% YoY), Heavy Engineering (+72%) and Hydrocarbon (+48% YoY), partly offset by Power (-47% YoY). Overseas E&C; segment grew by 13% YoY, driven by Power (+41% YoY) and Heavy Engineering (+110% YoY). INR4b provision booked for cost and time overruns in projects where claims have been raised but yet to be received, (b) adverse job mix and (c) higher raw material prices on fixed priced contracts.

For Q3FY19, TVS motor's EBITDA margins stood at 8.1%, where revenues Change in Estimates | Target | Reco were higher 27% YoY on the back of strong volume growth of 20% YoY, despite the overall industry demand being tepid on account of higher...