Larsen & Toubro slumps over 7 per cent; m-cap dips Rs 11,164.82 crore post results

MUMBAI: Shares of Larsen & Toubro slumped more than seven per cent today, wiping-out Rs 11,164.82 crore from its market capitalisation, after the company's June quarter earnings failed to meet market expectations.

The engineering major's stock tanked 7.32 per cent to settle at Rs 1,524.40 on the BSE. During the day, it lost 7.98 per cent to Rs 1,513.45.

At the NSE, Larsen's scrip plummeted 7.01 per cent to Rs 1,526.10.

Following the dip in the stock, the company's market value plunged Rs 11,164.82 crore to Rs 1,41,420.18 crore.

The stock was the worst performer among the bluechips on both Sensex and Nifty.

"The key negative surprise came in from the hydrocarbon segment (49 per cent revenue de-growth and negative 60 per cent contribution margins)," ICICI Securities said in a report.

Larsen and Toubro (L&T) had on Monday reported over two-fold increase in the consolidated net profit at Rs 966.89 crore for the April-June quarter, mainly on the back of gain on disinvestments and stake sale in one of its projects.

The company had reported a net profit of Rs 458.59 crore in the corresponding quarter of last fiscal.

Its revenues for the quarter under review increased 10 per cent to Rs 18,974.75 crore from Rs 17,241.14 crore in the year-ago period.

"The two-fold increase in PAT is a due to an expectational gain of Rs 249.28 crore on divestment of strategic investment in City Union Bank and stake sale in L&T Finance Holdings, which was listed in 2011.

"Stake sale in L&TFH was necessitated to comply with Sebi regulations to reduce promoter share," Group Chief Financial Office R Shankar Raman had said.

Segment-wise, the company's hydrocarbon business, which has been reporting a steady growth, witnessed a decline of 49 per cent in revenue to Rs 1,555 crore over the last quarter, mainly on account of lower opening order book and deferment of project awards.

Meanwhile, stock markets were closed yesterday on account of 'Id-Ul-Fitr'.