L&T [LT] Q4 Profit Dip: Why Analysts Remain Bullish Amidst Revenue Growth
Larsen & Toubro [LT] shares saw a dip despite robust revenue growth in Q4 FY24, raising questions about its future. However, leading brokerages like Jefferies maintain a positive outlook, highlighting underlying strengths.
Shares of infrastructure giant Larsen & Toubro [LT] experienced a nearly 4% decline following the announcement of its Q4 FY24 results. The company reported a 3% year-on-year (YoY) dip in net profit, settling at ₹5,326 crore. This slight fall in profit contrasts with an otherwise strong operational performance, leaving investors to ponder the stock's immediate future.
Despite the decline in net profit, L&T showcased impressive top-line growth. The company's revenue for the quarter surged by 11% YoY to reach ₹82,762 crore, underscoring robust project execution and order book strength. A significant contributor to this growth was the international business segment, which accounted for over half of the total revenue, highlighting L&T's expanding global footprint and diversified operations.
Operational stability was also evident, with Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) registering a healthy 5% growth. This suggests that while profit might have been impacted by specific one-off items or higher expenses, the core engineering and services segments continue to perform strongly.
Brokerages Remain Bullish on L&T [LT]
Interestingly, despite the profit dip, leading financial institutions like Jefferies and Goldman Sachs have maintained a positive stance on L&T. Analysts are likely focusing beyond the quarterly profit figure, considering the company's consistent revenue trajectory, strong order pipeline, and strategic focus on high-growth areas. The substantial contribution from international projects further de-risks the business model and offers long-term growth potential.
Jefferies, among other brokerages, likely sees the current dip as a potential buying opportunity, given L&T's established market position, diversified portfolio across various sectors, and robust operational execution capabilities. The market may be reacting to short-term profit fluctuations, while longer-term investors and analysts are assessing the broader picture of sustained growth and operational efficiency.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Stock market investments are subject to market risks. Please consult your financial advisor before making any investment decisions. StockTips.in is not a SEBI-registered investment advisor.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Stock market investments are subject to market risks. Please consult your financial advisor before making any investment decisions. StockTips.in is not a SEBI-registered investment advisor.