Concerns over growth in L&T’s Q2 report

By Mike Hayes04 November 2015

India-based construction, technology and engineering conglomerate Larsen & Toubro (L&T) has reported a consolidated net profit for the quarter to September 2015, of Rs 995.9 crore (US$ 1.52 billion).

Year-on-year, the firm’s consolidated net profit growth stands as 16%.

In its statement, however, L&T predicts weakening currencies and slowing global economics may constrain growth prospects and impact on investment.

The firm has, therefore, cut its forecast for new orders growth from 15%, down to between 5% and 7%, while analysts from both HSBC and Barclays downgraded the company’s stock to neutral, anticipating new orders growth falling by 11% and 12% respectively.

L&T’s Q2 figures show consolidated net sales of Rs 23393 crore (US$ 35.7 billion), equating to growth of 15.51% over the quarter and year-on-year growth of 10.55%.

The firm reported quarterly growth in consolidated core operating profit of 3.25%, while its operating margin fell 1.8% in the quarter.

For the six-month period to September 30, 2015, net profit stood at Rs 1889.39 crore (US$ 2.88 billion), equating to a fall of 2.39% from the previous year.

L&T’s revenue, at Rs 23944 crore (US$ 36.5 billion), equates to year-on-year growth of 3.86%.

Following the results, L&T share prices fell by 5% on the Bombay Stock Exchange.

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