L&T joins the downturn
ECONOMY & POLICY

L&T joins the downturn

Larsen & Toubro has finally caught up with the ongoing downturn in India's infrastructure and industrial sector. For the first time in Q2FY21, it registered a net loss on a standalone basis, excluding one-time gains from asset sales. The core business of engineering, construction, and manufacturing remains a drag at the consolidated or group level, and L&T now makes money from its IT services subsidiaries rather than its core business. L&T announced a loss from the continued option of Rs 1,767 crore

Larsen and Turbo observed that the effect of the pandemic on the lower revenue of higher credit provision in the sector of financial services and the disruption of metro services led to a decrease in profits, its current value in the market stock is falling rapidly. The stock fell to hit a low of 938.60 on BSE.

The rapid fall of L&T shares from its recent highs is the alignment with the main Market Corrections. Nifty has been updated almost 7% - 8% from the 11,600 stages of India's main benchmark index. Therefore, there is a higher selling demand amongst financial stocks and blue-chip securities, considering the recent decline in the overall market.

Government expenses, in the event of dampened private investment. To upbeat the stagnant mood, government capital expenditure (Capex) comes into effect. The current high fiscal deficit can create funding restrictions on government spending.

Despite the high capex target of Rs 111 lakh crore, the gap between the planning and implementation of these proposed infrastructure projects is considerably large.

This is because funding for the implementation of proposed projects is currently a key problem for the government. Therefore, the wide gap in Infra project planning-execution is a significant challenge for the infrastructure sector and unfavourable for L&T, as most of the L&T projects come from the government and due to improper management system, there is a delay in payments.

Existing labour costs increased due to the lack of labour after the recent Reverse Migration. Also, Operating profit margins are hindered by rising overall operating costs. As a result, reduced operating profit margins have severely hurt the profitability of the business.

They did not give guidance in the previous two quarters owing to the uncertain environment. Therefore the stakeholders are anticipating to see if things are looking up any time soon. The company provides guidance but remember two quarters before Q3 of FY20 the management had maintained order inflow guidance at 10-12% and revenue guidance at 12-15%.

Larsen & Toubro has finally caught up with the ongoing downturn in India's infrastructure and industrial sector. For the first time in Q2FY21, it registered a net loss on a standalone basis, excluding one-time gains from asset sales. The core business of engineering, construction, and manufacturing remains a drag at the consolidated or group level, and L&T now makes money from its IT services subsidiaries rather than its core business. L&T announced a loss from the continued option of Rs 1,767 crore Larsen and Turbo observed that the effect of the pandemic on the lower revenue of higher credit provision in the sector of financial services and the disruption of metro services led to a decrease in profits, its current value in the market stock is falling rapidly. The stock fell to hit a low of 938.60 on BSE. The rapid fall of L&T shares from its recent highs is the alignment with the main Market Corrections. Nifty has been updated almost 7% - 8% from the 11,600 stages of India's main benchmark index. Therefore, there is a higher selling demand amongst financial stocks and blue-chip securities, considering the recent decline in the overall market. Government expenses, in the event of dampened private investment. To upbeat the stagnant mood, government capital expenditure (Capex) comes into effect. The current high fiscal deficit can create funding restrictions on government spending. Despite the high capex target of Rs 111 lakh crore, the gap between the planning and implementation of these proposed infrastructure projects is considerably large. This is because funding for the implementation of proposed projects is currently a key problem for the government. Therefore, the wide gap in Infra project planning-execution is a significant challenge for the infrastructure sector and unfavourable for L&T, as most of the L&T projects come from the government and due to improper management system, there is a delay in payments. Existing labour costs increased due to the lack of labour after the recent Reverse Migration. Also, Operating profit margins are hindered by rising overall operating costs. As a result, reduced operating profit margins have severely hurt the profitability of the business. They did not give guidance in the previous two quarters owing to the uncertain environment. Therefore the stakeholders are anticipating to see if things are looking up any time soon. The company provides guidance but remember two quarters before Q3 of FY20 the management had maintained order inflow guidance at 10-12% and revenue guidance at 12-15%.

Next Story
Technology

AirBrick Infra Sets Rs 1 billion Target, Expands to Dubai and Tier-II Cities

AirBrick Infra, one of India’s fastest-growing AI-led commercial interior design and build firms, has announced a sales order target of Rs 1 billion for FY 2025–26. The projection represents a 50 per cent growth over the previous fiscal year and reflects rising demand, increased repeat business, and the company's robust tech-first delivery model.  Now in its third year of operations, AirBrick continues its rapid scale-up, having successfully delivered over 70 projects spanning 3 lakh sq ft in FY 2023–24. FY 2024–25 witnessed the onboarding of several Fortune 500 clients, sett..

Next Story
Resources

Virtusa Foundation Powers Green Education Drive in Bengaluru

The Virtusa Foundation, CSR arm of digital engineering and technology leader Virtusa Corporation, has announced key infrastructure and mobility initiatives at the Ramakrishna Mission, Shivanahalli, Bengaluru. The launch marks the inauguration of a 16-room residential facility for lady teachers and the deployment of two solar-powered electric buses, underscoring Virtusa’s commitment to its core pillars of Education, Environment and Empowerment (3Es).  Located on the forest fringe near Bannerghatta National Park, the initiative supports tribal and underserved communities, complementi..

Next Story
Infrastructure Urban

Godrej Enterprises Drives India’s Smart Green Logistics Shift

As India accelerates its transformation into a global manufacturing and logistics hub, Godrej Enterprises Group (GEG) is taking the lead with its smart, sustainable intralogistics solutions. Through its Material Handling Equipment (MHE) and Storage Solutions businesses, GEG is redefining operational efficiency in modern warehouses and factories using IoT, automation, and AI. GEG has consistently maintained a 20–25 per cent market share in the intralogistics sector over the past three years. Today, over 37 per cent of GEG’s revenues come from its Good & Green portfolio, and its net..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?