Larsen & Toubro Reports Mixed Financial Results with Key Metrics Showing Improvement in March 2025

Larsen & Toubro, a prominent player in the construction industry, has recently reported its financial results for the quarter ending March 2025. The company has experienced notable developments in its financial metrics, leading to an adjustment in its evaluation score.
Key highlights from the quarter include a significant improvement in the operating profit to interest ratio, which reached its highest level in five quarters at 4.08 times, indicating enhanced management of interest payments. The debtors turnover ratio also showed positive momentum, achieving a peak of 4.76 times, reflecting the company's efficiency in settling receivables.

Net sales reached Rs 74,392.28 crore, marking the highest figure in the last five quarters, while operating profit (PBDIT) also hit a record of Rs 9,875.94 crore. The operating profit margin improved to 13.28%, showcasing better operational efficiency. Profit before tax (PBT) and profit after tax (PAT) both reached their highest levels in five quarters, with PBT growing by 21.14% year on year. Additionally, earnings per share (EPS) rose to Rs 39.97, indicating increased profitability for shareholders.

However, the company faced challenges, including a decline in annual operating cash flow, which fell to Rs 9,160.71 crore, and a lower dividend payout ratio of 31.09%. The rise in non-operating income, while notable, raises questions about sustainability.

Overall, Larsen & Toubro's recent financial results reflect a mix of positive trends and areas of concern, leading to a revision in its score.

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