Construction giant Larsen & Toubro gave bullish stock markets a stinging bite on Thursday as it reported a year-on-year sales dip of six per cent in the latest quarter. Slower project work hit the numbers, with a sales drop reported for the first time in seven years. Analysts also fretted over its tepid forecast for the days ahead.
L&T shares closed at Rs 1,524, down 6.85 per cent at the BSE, taking with it the benchmark Sensex that plunged 2.4 per cent.
“Sales revenue remained subdued as a result of slower progress of certain jobs due to various extraneous factors as well as the effect of delayed financial closure of a few infrastructure projects,” L&T said.
“Sales growth declined for the first time in seven years and secondly market men did not like a lower revenue growth forecast for the full year. As per the company it would be down from 15 per cent to 10 per cent,” said V.K. Sharma, head of private broking, HFDC Securities Ltd.
Revenues fell to Rs 8,139 crore in October-December 2009 from Rs 8,699 crore a year earlier.
Net profit fell 50 per cent at Rs 758.82 crore from Rs 1,520.44 crore. But that was primarily because of an extraordinary income of Rs 916 crore including the sale of its concrete business in the same quarter of 2008.
Extraordinary income for the quarter ended December 2009 came down to Rs 62.55 crore which includes proceeds from a partial stake sale in the former Satyam Computer Services.
Prateek Agrawal, vice-president and head, equity at Bharti AXA Investment Managers, said L&T had bought shares of Satyam Computers in two parts, but lost money after the first round, forcing it to make provisions. But it gained from lower rates later. “Last month they sold shares at higher price making profit and reversed the provision made earlier,” Agrawal said.