Despite the economic slowdown and extended monsoons, Larsen and Toubro Ltd is expected to report steady earnings for the second quarter ended September 30, with 11 percent growth in the topline. The margins are expected to remain largely stable. There might be a bit of contraction because the operational leave was not there.

The profit optically would show a decline but there was a one-time gain of Rs 300 crore last year. However, having said that do remember that all these estimates do not factor in any consolidation from Mindtree as of now. So if that is consolidated, the numbers would look very different.

In terms of revenues, L&T is expected to report very strong growth, mainly from the hydrocarbon segment. The heavy engineering segment is also expected to see a sharp uptick in revenue and the infrastructure segment, which is the core business of the company, is expected to continue the double-digit gain. The power segment might continue to languish because the order inflow from the company in terms of power segment has not been started in terms of execution yet.

In terms of margins, the core E&C margin might drop marginally. The infrastructure margin is something to keenly watch out for because, in the last couple of quarters, the company has been missing the estimates. Overall, the margin performance from its subsidiaries in terms of IT and financial subsidiaries hasn’t been great. So that might have an impact as well.

The other thing to watch out for in the L&T earnings is the order inflows. Despite no capex coming in from the government, the order inflow is expected to be strong. We are expecting a number of Rs 42,000-45,000 odd crore.

Largely in terms of management commentary, the guidance is expected to remain the same but we will watch out for management commentary in terms of working capital because that has deteriorated quite a bit in the last quarter.