L&T to report strong Q2 growth

Mumbai, Oct 22: Larsen & Toubro (L&T) is expected to report robust earnings for July-September on Wednesday, helped by higher cement prices and a low profit base, analysts say.

Net profit is expected to jump nearly 400 per cent in the quarter from a year earlier, on a modest eight per cent rise in sales, according to a Reuters poll of 14 brokerages released earlier this month.

“The results will be driven by price increases,” said ananalyst with a local brokerage. “But we may not see the same growth in the October-December quarter.”

Net profit was forecast to swell 384.39 per cent to Rs 60.50 crore with sales up eight per cent at Rs 18.80 billion, the Reuters poll showed.

Analysts said L&T would benefit from higher cement pricesin July-September, compared with the same quarter last year, and a low profit base last year when cement industry was struggling with low prices and razor thin margins.

In the July-September quarter last year, for example, net profit fell 85.7 per cent to Rs 1,249 crore.

But fortunes turned for cement manufacturers between November to January 2001, when cement prices rose between 10 and 25 per cent. The price rise boosted the profitability of most cement makers, including L&T. In April-June, net profit leapt 245 per cent to Rs 65,070 crore.

— Reuters