L&T net down 7% on high interest cost, bonus issue fails to enthuse St

Larsen and Toubro Ltd (L&T) posted a worse-than-expected 6.9 percent fall in quarterly profit as interest costs jumped for India's biggest engineering and construction company.

FP Staff December 20, 2014 20:57:38 IST
L&T net down 7% on high interest cost, bonus issue fails to enthuse St

New Delhi: Larsen and Toubro Ltd (L&T) posted a worse-than-expected 6.9 percent fall in quarterly profit as interest costs jumped for India's biggest engineering and construction company.

LT net down 7 on high interest cost bonus issue fails to enthuse St

A Delhi Metro Rail Corporation employee works at the final tunnelling breakthrough of Qutub Minar and Saket stations. Reuters

Net profit fell to Rs 1.788 crore for its fiscal fourth quarter ending March, from Rs 1920 crore it reported a year earlier, said the company, whose interests span shipbuilding to railways to real estate.

Analysts expected the company to report a net profit of Rs 1856 crore.

A bonus issue of one share for every two held (1:2) failed to boost sentiment for the stock, which got hammered after the numbers were announced.

According to Sanjeev Zarbade, Vice President- Private Client Group Research, Kotak Securities, the company's revenue growth has mainly been driven by exports even though domestic revenue has been flat.

"Order intake in FY14 would be a function of upcoming opportunities in power, DFC and overseas. However, there could be potential of some disruption as it being a election-year," he said.

Shares in the company, valued at more than $18 billion, fell 3 percent after results.

Total income rose lower than expected 10 percent Y-o-Y to Rs 20,294 crore during the quarter.

Speaking at the result press conference, CFO R Shankar Raman saidthe company did not account for Rs 17,000 crore of slow moving orders. "The environment remains fairly challenging," he said.

With inputs from Agencies

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