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L&T's shares slip nearly 5 percent on weak Q2 earnings

L&T's shares slip nearly 5 percent on weak Q2 earnings

L&T's shares slip nearly 5 percent on weak Q2 earnings
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By Mousumi Paul  Oct 29, 2020 10:46:30 AM IST (Published)

Larsen & Toubro's shares declined nearly 5 percent on Thursday after the infrastructure giant reported a 45 percent decline in consolidated net profit to Rs 1,410.29 crore for the quarter ended September 30, 2020.

Larsen & Toubro's (L&T) shares declined nearly 5 percent on Thursday after the infrastructure major reported a 45 percent decline in consolidated net profit to Rs 1,410.29 crore for the quarter ended September 30, 2020. The stock fell as much as 4.8 percent to Rs 943.95 per share on the NSE. At 10:30 am, the shares traded 4 percent lower quoting at Rs 943.95 apiece.

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In the corresponding quarter last year, the company posted a net profit of Rs 2,527.3 crore. The company declared a special dividend of Rs 18 per share for the financial year 2020-21.
Total consolidated income fell to Rs 31,593.77 crore in the July-September quarter, against Rs 35,924.89 crore in the year-ago period. Total expenses slipped to Rs 29,455.57 crore from Rs 32,622.14 crore earlier.
Earnings before interest, tax, depreciation and amortization (EBITDA) declined 12 percent YoY to Rs 5,318.7 crore while EBITDA margin stood flat at 17.1 percent.
However, in Q2FY21, the company's orders fell 42 percent YoY to Rs 28,039 crore, which brought the order book down 1.4 percent to Rs 2,98,856 crore.
Among all its segments, the power business registered the highest gains as revenue went up 40 percent YoY to Rs 689 crore. Meanwhile, infrastructure and defence engineering segments posted a revenue loss of 20 percent YoY.
CLSA in its report said that it has raised its SOTP-based target price from Rs 1,280 to Rs 1,400.
"We reiterate our BUY rating as we see L&T as a good proxy for domestic capex. L&T is inexpensive and is on the cusp of the next capex cycle upturn," the report added.
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