Larsen and Toubro has posted 45.51 per cent increase in net profit at Rs 609.6 crore for the quarter ended June 30, 2016 as compared to net profit of Rs 418.94 crore in the year-ago period.
Larsen and Toubro shares slumped over 4 per cent on Monday after the engineering major reported lower-than-expected first quarterly numbers. The company posted 45.51 per cent increase in net profit at Rs 609.6 crore for the quarter ended June 30, 2016 as compared to net profit of Rs 418.94 crore in the year-ago period. Anaylsts have called it a disappointing result and dont’t expect profitable numbers in second half of 2016-17 and FY18. Religare Institutional Research has maintained a ‘SELL’ rating on the stock of the company and said,”capital misallocation of the past would hurt profitability in H2FY17/FY18.”
At 10.54 am, share price of Larsen and Toubro was trading 1.77 per cent down at Rs 1530.50. The scrip opened at Rs 1561 and has touched a high and low of Rs 1584.95 and Rs 1528.25, respectively, in trade so far. Later, the scrip ended 4.12 per cent down at Rs 1493.80
The company reported 9.10 per cent to Rs 21,873.8 crore increase in total income in the April-June quarter from Rs 20,048.24 crore during the same period in 2015-16.
Reliagre furthet said,”Larsen and Toubro reported below-expected Q1FY17 results (PAT +46% YoY to Rs 6.1bn) as a shift to Indian AS norms shored up provisions. Order inflows increased 14 per cent year-on-year to Rs 297bn, while domestic order inflows declined 9% YoY. The current valuations of 18.5x-FY18E consol. Earnings per share (EPS) are supported by the likely divestment of low-return businesses, even as the outlook on order inflows and execution remains uncertain.”
Edelweiss Securities told CNBV TV 18 that it is disapoointed by Larsen and Toubro’s performance and expects no improvement in working capital going forward.