AI-generated · cited to primary sources · not investment advice
Larsen & Toubro (500510) Jul 2025 Filing Analysis
Does management do what it says?
Ridership for the quarter was 4.39 lakh passengers per day, effectively meeting the lower end of the guided range. (2 met across 2 tracked commitments)
“I think it is a question of time when the ridership will again start inching back to 4.4, 4.5 levels.”
Q1 FY26 revenues stood at Rs 637 billion, which is approximately 23.6% of the annual target of Rs 2.7 trillion. (3 in progress, 1 met across 4 tracked commitments)
“We expect our group order inflows and group revenues to grow at 10% and 15% respectively for FY26.”
The trailing 12-month ROE has improved to 17% as of June 2025, moving closer to the 18% target for the end of the Lakshya plan. (3 in progress, 1 revised across 4 tracked commitments)
“And the plan to reduce the debt levels from Rs.12,000 crores to Rs.8,000 crores is a combination of two things. We are yet to get around Rs.2,100 crores of the State Government interest-free loan assistance and also TOD monetization we expect it to happen over the near term”
See the full cited Management analysis of Larsen & Toubro
How durable is the business?
Revenue grew significantly by 47% due to execution ramp-up in Hydrocarbon, though margins declined to 7.3% from 8.7% due to competitive pricing on older international jobs. (2 expanding, 1 shifted, 1 contracting)
“The Q1 FY26 revenues for this segment at Rs.125 billion registers a robust growth of 47% driven mainly by the execution ramp up across domestic and international projects of Hydrocarbon”
See the full cited Business Model analysis of Larsen & Toubro
What could break the thesis?
Slow-moving orders remain a small but persistent part of the portfolio at 2% of the total order book, primarily driven by the aforementioned JJM funding issues. (2 stable)
“As of June ‘25, the slow-moving orders constitute around 2% of the order book.”
See the full cited Risk analysis of Larsen & Toubro
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