Larsen & Toubro - March 2013 Results Preview - Motilal Oswal

- Company had given a guidance of 15-20% YoY (worth INR810-850b) growth in order intake over FY13, against which it has reported orders worth INR601b over 9MFY13 and has announced orders worth INR163b during 4QFY13. We believe L&T is likely to meet its intake guidance given 94% of the lower band is already achived.

- Net working capital has been showing a rising trend since the beginning of FY13 due to increased vendor support in a tough market. Company had reported net working capital at 17% of sales during 3QFY13. We expect net working capital to peak ~17% by FY13-end.

- During 9MFY13, E&C EBITDA margin was at 9.8% (down 50bp YoY) v/s management guidance of +/-50bp in FY13. Margins in 4QFY13E would be supported by the decline in commodity prices, as 30-40% of the order book is on fixed price contract, including large part of the book comprising of international market.

Source : Equity Bulls

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