L&T Shares Fall Over 6% After Operating Margin Misses Estimate
'Operating margins are still below their guidance on account of legacy order execution and new orders that have not yet achieved the margin recognition threshold,' Motilal Oswal Securities said.
Shares of Larsen & Toubro Ltd. declined on Wednesday after its operating margin fell 48 basis points missing analysts' estimates.
The company's net profit rose 17.24% year-on-year in the quarter ended December 2023 on the back of strong order inflows and project execution. However, Ebitda margin dropped to 10.44% and missed the estimate.
"Operating margins are still below their guidance on account of legacy order execution and new orders that have not yet achieved the margin recognition threshold," Motilal Oswal Securities said in a report.
L&T Q3 FY24 Highlights (Consolidated YoY)
Revenue from operations rose 18.83% to Rs 55,127.8 crore (Bloomberg estimate: Rs 53,571 crore).
Ebitda, or operating profit, up 13.52% to Rs 5,759 crore (Bloomberg estimate: Rs 5,984.7 crore).
Ebitda margin fell 48 bps to 10.44% vs 10.93 a year ago (Bloomberg estimate: 11.2%).
Net profit up 17.24% to Rs 3,594.51 crore (Bloomberg estimate: Rs 3,245.7 crore).
Shares of the company fell as much as 6.78% to 3,387.05 apiece, the lowest since Dec. 12, 2023. It was trading 5.60% lower at Rs 3,429.95 apiece, as of 10:42 a.m. This compares to a 0.45% advance in the NSE Nifty 50 Index.
The stock has risen 61.45% in the past 12 months. Total traded volume so far in the day stood at 10 times its 30-day average. The relative strength index was at 42.
Out of 35 analysts tracking the company, 31 maintain a 'buy' rating, two recommend a 'hold,' and two suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 10.5%.
