Sustainable Infrastructure margin trend?
Refraining from giving margin guidance. Q3 Infra ~6.2% vs ~6.1% QoQ comparable. Better order mix from large orders + cost savings + better execution. With near-normalcy, under-recovery of overheads will reduce. Quarter-on-quarter volatility expected based on job mix.
Q3 announced order inflow Rs.630bn vs exchange-disclosed Rs.760bn till date — 130bn gap; possible to share L1 pipeline?
Won't comment on L1 — we book inflows only after formal LOA. Some announcements happening in subsequent quarters could relate to LOAs from earlier quarters.
International / Middle East order inflow over next 12-18 months including Hydrocarbon?
International prospects ~Rs.40,000 crore from Water, Renewables, Power T&D. No major Hydrocarbon Middle East prospects given subdued crude. Hydrocarbon mid/downstream + Petrochemicals could be more visible mid/end FY22.
Execution ramp-up softer than anticipated? Inherent bottlenecks?
Quarter-on-quarter revenue improved 15% group-level. Movement-related supply chain bottlenecks largely cleared; some import/cross-border restrictions. Refraining from revenue guidance. Workforce at 100% requirement (2,65,000 across 900 sites).
Quantify steel/cement inflation impact in basis points?
Don't have ready answer. Where no cost pass-through, inflated procurement reflected in reported margins.
Hyderabad Metro refinancing timeline?
Discussions positive with Telangana government and lenders. Given size and complexity it takes time. Hopefully by March 21 or Q1 FY22 substantive progress on refinancing.
On a tunneling contract bid below authority's cost — rationale?
Each bid evaluated standalone — cost build-up based on actual procurement prices. Sometimes our bid is above client estimate, sometimes below. Won't generalize from one project.
Q3 margins reflect steel/cement increase — Q4 cost-to-completion negative surprise risk?
Cost-to-complete reassessed each quarter; current contracted rates and forward expected rates. Won't comment on Q4 one-off risk; geological/site surprises possible either way.
Color on real estate transaction — large quantum, any one-offs?
Realty business is leasing or outright sale; commercial space sale this quarter contributed PAT impact of ~Rs.340 crore. Not one-off — part of normal real estate accounting.
Where is improvement coming in NWC?
NWC stable Dec20 vs Mar20 mainly due to gross WC drop from improved customer collections. Vendor payments accelerated to support supply chain.
Did mobilization advances support working capital?
In Q3 we secured ~Rs.450 crore advance against the HSR (high-speed rail) order.
Cash infused into Hyderabad Metro in Q3 — any plan to increase in Q4?
Rs.500 crore infused in Q3. Of Rs.2,000 crore set aside (mentioned in H1 call), rest deployed based on requirements until refinancing/restructuring achieved.
Are Q1/Q2 lockdown loss claims being settled with customers?
Pursuing conciliation with repeat government customers. 100% positive movement. Hopefully in 3-4 quarters some claims will materialize. Already expensed in P&L. Too early to comment on amount.
Why holding Rs.45,000 crore cash and equivalents — quite high?
Of Rs.45,000 crore: FS Rs.7,000 crore; IT&TS subsidiaries Rs.7,000 crore; rest in core/parent. Plan: Hyderabad Metro infusion, L&T Finance rights, debt retirement. Q3 itself reduced debt ~Rs.5,000 crore.
End-Sept H2 prospect base was Rs.6 trillion; now Rs.2.65 trillion — order prospect slippage?
Sept base was for balance 6 months; current Rs.2.65tn is Q4 only. Some Q2 prospects may have deferred to next year or been won by competitors. Pipeline is dynamic bottoms-up.
Impact of commodity prices on margins — steel/cement?
Steel ~9% and cement ~6% inflation factored in Q3 reported margins. Believe prices unsustainable; government noting it. 50% of contracts cost-plus — sufficient inflation buffers.
Productivity levels — when back to normal?
Vast Q3 improvement; Infra most visible productivity drag. With vaccination expected to cover large population in next two quarters, productivity should normalize — Q4 or Q1 next year.
Has competition intensity reduced in Infra/Hydrocarbon?
Each project priced standalone — no compromise on margins. Edge in large complex orders vs competition. For 500-1,000 crore jobs ~8-10 bidders; >2,000-2,500 crore narrows to 4-5.
Hydrocarbon margins ~12% — any claims/write-back?
Q3 primarily on account of efficient execution — no specific claims contribution.
Defence pipeline — Vajra and follow-on?
Government cleared ~Rs.28,000 crore opportunities for domestic bid — positive but Defence ordering patchy. Current prospects ~Rs.3,500 crore. K9 Vajra: 91 of 100 delivered (13 in Q3).
Standalone debt levels — when normalize?
Pre-emptive Rs.12,000 crore market borrowing in Q1 lifted debt. Post E&A divestment proceeds, pruning underway. Net debt-equity at parent ~0.1; expected near-zero post March.
Sharp jump in standalone other income — drivers / one-offs?
Higher investible surplus from EAIC divestment proceeds and better treasury management.
Hyderabad Metro PBT/PAT for Q3 / 9M?
Q3 revenues Rs.50 crore (Rs.30 crore from ridership). Opex Rs.50-60 crore. Depreciation Rs.75 crore. Interest Rs.365 crore/qtr.
Realty optimism in market — sales positivity, new launches and contracting exposure?
Realty: 5,600 total residential units; 2,600 sold/transferred; 1,900 contracted; 1,100 unsold. Mid-ticket (2BHK/3BHK) seeing offtake — Navi Mumbai and Bangalore phase 2/3 favorable. Contracting RE order book Rs.45,000 crore — major executable, only Navi Mumbai airport non-moving. Mass housing, hospitals, data centers seeing pickup.
Site access and execution acceleration on awarded orders?
Most large 9M orders have financing secured; HSR has no major right-of-way / land issues.
Q4 pipeline 2.65tn — comparison to last year and Infra split?
Q4 FY20 prospect pipeline ~Rs.2.90 lakh crore. Infra ~80% of current 2.65tn (Rs.2.20 lakh crore).
Slow moving orders in book?
Slow-moving in Rs.3,31,000 crore book is minuscule and negligible.
Core NWC, ROE ex-E&A, Uttaranchal PPA, Nabha exit, Hyderabad Metro debt/equity, Hyderabad Metro cash burn ~Rs.375 crore?
HM Q3 cash burn ~Rs.375 crore (interest Rs.365 + Rs.10 crore opex shortfall). Uttaranchal hydropower fully commissioned; PPA discussions on; selling via merchant short-term meanwhile. Nabha sale pursued; thermal valuations weak — taking time. Core working capital Rs.22,000 crore. ROE ex-E&A gain ~10.3%. HM debt Rs.14,000 crore; equity Rs.2,500 crore.
Segment EBITDA margins — core or with apportioned other income?
Core operating margins; other income reflected in corporate segment.
PAT contribution from IT business at L&T consolidated level?
Last analyst presentation slide (#29) provides this — IT&TS PAT direct, FS direct from holdings consolidation.
50% variable-price — domestic only or overall? International is largely fixed?
Overall. Intl mostly fixed-price (some commodity-variation contracts, but smaller proportion than domestic).
Hyderabad Metro refinancing economics — interest cost reduction post refinancing? Equity infusion needs?
Daily ridership 1L average (1.25-1.30L weekdays). Need 3-4L for breakeven. Refinancing parallel-track with stakeholders — won't commit timeline. Rs.2,000 crore set aside enables responsible-investor signaling. Hopefully in next 1-2 quarters constructive progress.
Hyderabad Metro total project cost? Cost overruns funded?
Metro operations ~Rs.16,000 crore. TOD has 18.5mn sqft potential; only 1.2mn sqft developed. No further metro cost increase expected; future spend will be TOD.
HSR mobilization advance — interest-bearing?
Interest-free. Another similar installment expected this quarter.
AP receivables status — recovery progress?
Collections coming at trickle. Net of receivables Rs.1,800-1,900 crore (gross). ~Rs.100 crore ECL provided. Asset standard; we believe it will come over due course of time.
Net working capital absolute target for FY21 by group?
Group NWC Rs.31,000 crore (Dec20). Core Rs.22,000 crore. Intent to maintain Mar21 absolute level same as Mar20. Ramping execution where collections visible; restraining where not.
Hedging strategy on fixed-cost portion of order book against commodity risk?
Risk management protocol: corporate treasury provides expected procurement rates at bid stage. Haven't witnessed near-term cost overruns from commodity adverse moves where pass-through unavailable.
Order book multilateral exposure split? 2.2tn domestic prospects sector-split?
Multilateral funded order book ~Rs.91,000 crore of Rs.3.31 lakh crore. Q4 domestic prospects: Infra major, Hydrocarbon ~Rs.15,000 crore, others ~Rs.8-9,000 crore. Infra evenly across B&F, Heavy Civil, Transportation Infra, Water.
Infra international execution lagging — logistics constraints?
Not cargo movement prices but cross-border supply chain constraints — improving in Q3, expected near-normal in Q4.