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.

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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).

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