For Q4FY22E, all EPC companies under our coverage reported decent order inflows. Larsen & Toubro (L&T) announced EPC orders in the range of ~Rs. 9000-22000 crore (as on date, ex-services segment) across railway, hydrocarbon, power T&D, water treatment, heavy engineering, buildings & factories segments. Order inflow for L&T for Q4FY22 has so far remained below our expectations. In the T&D space, KEC has announced decent order inflows of Rs. 2136 crore aided by orders from T&D (domestic, international markets), railways, civil, etc. Thermax announced decent order inflows worth ~Rs. 1176 crore as on date for Q4FY22 while a further pick-up in industrial capex would improve its revenue visibility. Bharat Electronics (BEL) has announced strong orders worth ~Rs. 3068 crore coupled with a strong order backlog for FY23E. Overall, order inflows are expected to remain decent, with some project deferrals across key segments to Q4FY22E. However, the order pipeline remains robust across T&D, green energy corridor, railways, transportation, water and infrastructure, etc. Key risks remain project delays/deferrals, lower conversion rate.
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