L&T Reports 67% Drop in Net Profit; Shares Gain 4%

Despite a 67 percent drop in net profit year over year in the July-September period, shares of engineering major Larsen & Toubro (L&T) rose as much as 4% in early Mumbai trading on Thursday, as investors took heart from better margins in projects and manufacturing amid signs of a decline in the coronavirus crisis.

Larsen & Toubro Ltd, or L&T, is an Indian multinational company headquartered in Mumbai with interests in engineering, construction, manufacturing, technology, and financial services. The firm is one of the top five construction firms in the globe.

On the National Stock Exchange, the company's stock hit a high of Rs 1,862, up from Rs 1,784.55 at the previous closing. The stock was up 3.64 percent at Rs 1,849.45 at 10:15 a.m., while the NSE Nifty was down 0.68 percent to 18,093 at the same time.

The company posted a profit of Rs 1,819.45 crore in the July-September quarter, compared to Rs 5,520.27 crore a year ago, when it announced its second-quarter profits after market hours on Wednesday.

During the quarter, L&T received top orders in a variety of areas, including Oil & Gas, Metros, Rural Water Supply, Minerals and Metal, Public Space, and Power Transmission and Distribution.

"During the second COVID wave, L&T made the correct decision to emphasise balance sheet strength over growth. As building activity starts up post-monsoon, labour availability should no longer be an issue, and execution should improve. If and when the order inflow picks up, we anticipate L&T will have a significant earnings growth momentum "Motilal Oswal Financial Services, a stockbroker, said as much.