Larsen & Toubro’s shares plunge over 5% during Thursday’s trade; Here’s why

Updated: 11 May 2023, 10:51 AM IST

Larsen & Toubro's Q4 profit rose 10% to 3,987 crore, but its shares fell during Thursday's trade due to missed market expectations. The company proposed a final dividend of 24 per equity share.

According to a Mintgenie poll, an average of 37 analysts have a ‘STRONG BUY’ call on the stock.

Shares of Larsen and Toubro experienced a 5.3 percent decline on Thursday, May 11, after its Q4 earnings failed to meet market expectations. The company reported a consolidated net profit for the quarter ended March 2023 at 3,987 crore, up 10 percent compared to 3,621 crore in the same quarter last year.

On Thursday, the stock opened on a negative note of Rs. 2,300 per share against the previous close of Rs. 2,364.45 per share and dropped further to touch an intraday low of Rs. 2,237.35 a piece.

It was trading at Rs. 2,260, down by 4.42 percent at 10:30 a.m. on the NSE.

The stock touched a 52-week-high of Rs. 2,416.35 on May 02, 2023 and a 52-week-low of Rs. 1,456.35 on June 20, 2022, indicating that at the current levels, the stock is trading nearly 55 percent above its 52-week low and 6.4 percent below its 52 week high.

The stock has returned over 12 percent in the last six months. Furthermore, the shares of the company have surged nearly 44 percent in the last one year. Moreover, it has grown almost 63 percent in the last five years.

Share price chart of Larsen and Toubro

According to an exchange filing, the company's revenue from operations for the quarter reached 58,335 crore, which represents a growth of 10 percent from 52,851 crore. The company also noted that the share of its international revenues during the quarter was 39 percent.

The Q4FY23 EBITDA increased to 6,833 crore, a growth of 5% as compared to 6,517 crore in the same quarter last year. However, the EBITDA margin declined to 11.7% in the current quarter from 12.3% in Q4FY22.

On Wednesday, the board of directors of the company proposed a final dividend of 24 per equity share, which is subject to the approval of the shareholders.

In other news, The engineering firm had two pleas dismissed by the Bombay High Court. These pleas were filed after L&T's bids for the construction of the Borivali-Thane underground twin tube tunnel beneath the Sanjay Gandhi National Park were rejected by the Mumbai Metropolitan Region Development Authority (MMRDA).

L&T filed two petitions in which they sought the quashing and setting aside of the rejection of their technical bid for package 1 of the Borivali-Thane tube tunnel project. This package includes the construction of 5.75 km of the tunnel on the Borivali side.

In the second petition, L&T argued that despite being a successful bidder, its bid for package 2, which involves constructing 6.09 km of the tunnel on the Thane side, was rejected by the authorities.

Larsen & Toubro Ltd.'s engineering services division is increasing its investments in autonomous and electric vehicle technologies, relying on India's potential as a skilled resource provider for international manufacturers seeking to broaden their horizons in the area.

According to a Mintgenie poll, an average of 37 analysts have a ‘STRONG BUY’ call on the stock.


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First Published: 11 May 2023, 10:50 AM IST