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.

• Coal India, AMNS Sign MoU on Syn-Gas at Paradip Plant
• HAL Hits 52-Week High of Rs 5,055 on Strong Q1 Results
• MP Approves Rs 1,757 Crore Bhopal-Vidisha Road Project
• Nvidia Reportedly Developing 1 Trillion-Parameter AI Model
• West Coast Paper Hits 52-Week High on Strong Q1 Profit

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