Overview

India has shown strong economic growth amidst global challenges, achieving over 8% GDP growth in the past year. Government efforts to boost capital spending, improve business conditions, and develop digital infrastructure have supported this growth. Initiatives like the Production Linked Incentive scheme and the National Infrastructure Pipeline are laying the foundation for a $35 trillion economy by 2047.

The Company has thrived under these positive conditions, demonstrating resilience and excellence across various sectors. Key areas include:

1. EPC Projects: Leading large-scale infrastructure projects both in India and internationally, such as the Mumbai Trans Harbour Link and a major solar plant in Saudi Arabia.

2. Hi-Tech Manufacturing: Providing industrial equipment and contributing to India's space missions, including Chandrayaan-3.

3. Services: Delivering IT, engineering, and financial services, with notable achievements in digital transformation and skill development.

4. Other Businesses: Involved in real estate, construction machinery, and global tyre curing machinery.

The Company has achieved significant growth, with a 31% increase in order inflow and a 25% rise in profit after tax. It has also undertaken strategic divestments and improved shareholder returns, including a substantial dividend payout.

Technological advancements and sustainability efforts are central to the Company’s strategy. It is a leader in digitalization and green practices, contributing to clean energy projects and aiming for carbon neutrality by 2040. Social responsibility initiatives have positively impacted over 1.6 million people.

Assets

Larsen & Toubro's asset base showcases impressive growth and stability. As of March 31, 2024, the total assets surged to ₹3.40 lakh crore, up from ₹3.30 lakh crore the previous year. The increase in non-current assets to ₹1.22 lakh crore from ₹1.08 lakh crore highlights significant investments in property, plant, and equipment, which rose to ₹1.33 lakh crore from ₹1.13 lakh crore. The company also maintained a robust inventory level of ₹6,620 crore despite a slight dip from ₹6,828 crore.

Current assets amounted to ₹2.17 lakh crore, down marginally from ₹2.21 lakh crore. Key components include a substantial reduction in cash and cash equivalents to ₹11,958 crore from ₹16,926 crore, alongside a noteworthy rise in trade receivables to ₹48,770 crore from ₹44,731 crore. The total assets growth reflects Larsen & Toubro's strong operational and investment strategies.

Equity and Liabilities

For Larsen & Toubro, the equity and liabilities section of the balance sheet reveals a solid financial structure. As of March 31, 2024, the total equity stands at ₹1.03 lakh crore, a slight decrease from ₹1.04 lakh crore the previous year. This includes equity attributable to the company’s owners, which dropped to ₹86,359 crore from ₹89,326 crore, while non-controlling interests increased to ₹16,190 crore from ₹14,241 crore.

Liabilities, both non-current and current, totaled ₹2.37 lakh crore, up from ₹2.27 lakh crore. Non-current liabilities decreased to ₹60,477 crore from ₹64,719 crore, with borrowings and lease liabilities contributing significantly. Current liabilities rose to ₹1.77 lakh crore from ₹1.62 lakh crore, driven by higher borrowings and trade payables. This comprehensive balance sheet underscores Larsen & Toubro's robust financial health and its strategic focus on managing liabilities effectively.

Income

For the fiscal year ending March 31, 2024, Larsen & Toubro reported substantial growth in its income. Revenue from operations reached ₹2.21 lakh crore, up from ₹1.83 lakh crore in the previous year, showcasing a significant increase in operational performance. Other income also saw a notable rise to ₹4,158 crore from ₹2,929 crore. As a result, the total income for the year surged to ₹2.25 lakh crore compared to ₹1.86 lakh crore in 2022-23. This robust performance highlights the company's successful expansion and improved revenue streams.

Expenses

In the year ending March 31, 2024, Larsen & Toubro’s total expenses rose significantly to ₹2.05 lakh crore, up from ₹1.69 lakh crore in the previous fiscal year. Key expense categories include manufacturing, construction, and operating costs, which increased to ₹1.46 lakh crore from ₹1.17 lakh crore. This rise was driven by higher costs in construction materials and sub-contracting charges.

Employee benefits expense also saw an increase to ₹41,171 crore from ₹37,214 crore. Sales, administration, and other expenses grew to ₹10,419 crore from ₹8,758 crore. Finance costs and depreciation expenses rose moderately, reflecting ongoing investments and operational costs. These increased expenses align with the company's growth and expanded activities.

Profit and Tax

For the year ending March 31, 2024, Larsen & Toubro achieved a notable profit before exceptional items and tax of ₹20,423 crore, compared to ₹16,973 crore in the previous year. Exceptional items before tax resulted in a net gain of ₹114 crore, reversing the loss of ₹92 crore reported in 2022-23.

After accounting for taxes on exceptional items, the adjusted exceptional gain was ₹94 crore, up from ₹136 crore. Profit before tax increased to ₹20,517 crore from ₹17,109 crore. Tax expenses for the year were ₹4,947 crore, up from ₹4,484 crore, with a significant rise in current tax.

The final profit after tax reached ₹15,570 crore, compared to ₹12,625 crore in the previous fiscal year. Despite a slight loss share from joint ventures and associates, the overall profit for the year amounted to ₹15,547 crore, reflecting robust financial performance and effective tax

Cash Flow

For the fiscal year ending March 31, 2024, Larsen & Toubro reported a net decrease in cash and cash equivalents of ₹4,984 crore, contrasting with an increase of ₹2,893 crore in the previous year.

Operating activities generated a strong cash flow of ₹18,266 crore, compared to ₹22,777 crore in 2022-23. This was influenced by substantial adjustments including depreciation and impairment costs, finance costs, and significant changes in working capital.

Investing activities led to a net cash inflow of ₹2,163 crore, a reversal from the previous year's outflow of ₹8,312 crore. This change was driven by variations in investments, sales of assets, and considerations received from disposals and transfers.

Financing activities saw a considerable outflow of ₹25,413 crore, compared to ₹11,572 crore in 2022-23. Major outflows included share buybacks and repayment of borrowings, which were partially offset by new borrowings and proceeds from share capital issuance.

Overall, cash and cash equivalents decreased to ₹11,958 crore by year-end from ₹16,927 crore at the beginning of the year, with the exchange rate changes contributing minimally to the final balance.

AI Insights on Larsen & Toubro’s Financial Growth and Future Prospects

Larsen & Toubro's financial statements for FY 2023-24 highlight a robust and resilient growth trajectory, showcasing the company's strategic prowess in navigating market challenges. The substantial increase in total income, driven by strong operational performance across diverse segments, indicates a solid foundation for sustained growth. Despite a slight dip in equity, the company’s effective cash flow management and strategic investments have kept it on a stable financial footing. The rise in current liabilities reflects a deliberate approach to leveraging short-term financing to fuel expansion and operational efficiency.

AI analysis suggests that Larsen & Toubro is well-positioned for future growth, with its diversified business model providing a buffer against market volatility. The company’s focus on infrastructure, heavy engineering, and technology-driven projects is likely to continue yielding positive results. As L&T strengthens its foothold in key sectors, it is expected to maintain its leadership position and achieve steady financial growth in the coming years.