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Shares of Larsen & Toubro dropped as much as 4.3 per cent to Rs 1,210.05 on muted growth guidance
The company had on Saturday reported 26.2 per cent rise in net profit for the second quarter, beating analysts’ estimates.
Profit rose to ₹1,820 crore in Q2 FY18, against ₹1,435 crore in the same period last year, while the company’s revenue for the quarter rose 6 per cent to ₹26,447 crore.
While L&T said it is committed to its earlier announced revenue growth guidance of 12 per cent, the same might not be true for the order inflow guidance, as expectations of accelerated growth in orders in the domestic market are not playing out yet.
"It (weak orders) has led to management softening its FY 18 guidance on new orders to expect nil-to-marginal growth,” according to Deutsche Bank analysts.
But a 7 per cent growth in orders for H2 FY18 is likely, given large infra and defence projects at bidding stage, Deutsche Bank added, raising the stock's price target to Rs 1,475 from Rs 1,350.
“Slowdown in ordering is a bigger concern, though prospects remain strong,” analysts at Nomura said, but added that L&T's Q2 operational performance was encouraging.
Twenty-eight of 36 analysts covering the stock have a "buy” rating, seven have “hold” while one has sell; their median price target is Rs 1,329.50, according toThomson Reuters Eikon data.
The stock had risen about 41 per cent this year up to Friday's close.
(With inputs from Reuters)
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