Shares in Larsen & Toubro Ltd (L&T) fell sharply on Monday as many leading brokerage firms including Motilal Oswal said that one of the company?s Middle East units had possibly booked a net loss of $23 million from commodity hedging against a profit of Rs 85 crore in 2007. It has lowered L&T’s profit estimate for 2007-08 by 7% to Rs 2,400 crore. L&T ended 8.68% lower at Rs 2,728.80 against its previous close of Rs 2,988.20.
Following the reports from the brokerages, the counter attracted huge trading volume of 11.97 lakh shares on the Bombay Stock Exchange (BSE) on Monday against normal two-week average volume of 3.34 lakh shares.
However, the company said that during the year 2007-08, there has been extreme volatility in the markets, especially in commodity prices. The company has exposure in commodities and part of it is being hedged by it. ?As per unaudited figures, there could be a loss in commodity hedging of around Rs 200 crore. The actual numbers will crystalise on finalisation of accounts,? the company said. L&t also said that it has reduced exposure to a considerable extent. ?The company maintains its guidance on order booking, sales and operating margins for the year with emphasis on improvement in operating margins,? the company said in a BSE filing.