India’s largest engineering and construction major Larsen and Toubro’s (L&T’s) net profit to decline up to 60 per cent sequentially. Besides, a slowdown in construction activity would have hit the company’s project execution capabilities, they believe. The company is slated to report its Q1FY22 numbers on Monday, July 26.

“We expect Q1FY22 to be a weak quarter in terms of execution and profitability across the cand industrials space, as a sharp spike in Covid-19 cases across India, particularly in April-May, impacted execution levels,” said a report by foreign brokerage Nomura.

• Ashoka Buildcon JV Bags Rs 1,041-Crore BMC Flyover Project; Shares End 2.30% Higher
• WPIL Shares End 7.75% Higher on Order Win
• Biocon Launches Diabetes, Obesity Drug-Device in Netherlands; Shares Trade Flat
• Bharat Electronics Shares Trade Higher on Rs 776 Crore Orders 
• Granules India Shares Slump Despite Securing EIR from USFDA 

It added: Q1FY22 also saw a further rise in commodity prices (especially steel), compared with Q4FY21, leading to further aggravation of pressure on gross margins. Thus, we expect execution to weaken for EPC companies like L&T from the March quarter of FY21 (Q4FY21).

Stock Covered in the news

Larsen and Toubro’s (L&T’s)-View Detailed Analysis