L&T share falls 5% on weak Q2 earnings, here's what brokerages say

Share price of Larsen & Toubro (L&T) fell nearly 5% today after the engineering and construction giant posted a 45 per cent decline in consolidated net profit for Q2. L&T stock opened with a loss of 3.12% at Rs 953 against previous close of Rs 983.65 on BSE. The stock has fallen after 9 days of consecutive gain.

L&T share touched an intraday low of Rs 935.55, falling 4.89% on BSE.

The share trades higher than 20 day, 50 day and 100 day moving averages but lower than 5 day and 200 day moving averages.

The share has lost 35.36% in one year and fallen 27.32% since the beginning of this year.

Total 2.49 lakh shares of the firm changed hands amounting to turnover of Rs 23.57 crore on BSE. Market cap of the firm fell to Rs 1.32 lakh crore.

The firm reported a net profit of Rs 1,410.29 crore for the quarter ended September against net profit of Rs 2,551.67 crore in the year-ago period.

"Net Profit After Tax (PAT) and share in profit / (loss) of joint ventures / associates from continuing operations before exceptional items for the quarter is at Rs 1,410 crore, registering a sequential improvement of nearly 4 times reflecting pickup in the business momentum. However, the impact of pandemic in terms of lower revenue, higher credit provisions in the Financial Services business and disruption of the Metro services, led to decline of 45 per cent vis-a-vis reported PAT of corresponding quarter of the previous year at Rs 2,552 crore," the company said.

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Macquarie said core E&C continues to suffer due to Covid impairment in Nabha is a large portion of Rs 3,500 crore  of FY20 book.  The brokerage gave a target price of Rs 1,420.

CLSA said valuations of the stock are inexpensive and it's on cusp of next capex cycle upturn. There are clear signs of execution picking up in second half of this fiscal. Full workforce in Q3 should improve execution in second half. CLSA gave a buy call on the stock with target price of Rs 1,400.

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