Results in-line, CLSA says on L&T Q3; shares gain

Larsen & Toubro (L&T) shares gained on Monday after the company reported 14% year-on-year (yoy) growth in net profit for the third quarter ended December 31, 2016.

On January 28, 2017, L&T registered net profit of Rs 1238.62 crore, a rise of 14.42% compared to Rs 1082.47 crore in the corresponding period of the previous year.

At 10.44 am, the shares of L&T were trading at Rs 1447 per share, up Rs 7.35 or 0.51%.

A CLSA report stated that L&T's profit after tax (PAT) was in-line but was much better in quality.

"Also, the company's margin was so good that even after provisions of Rs 370 crore it delivered PAT growth of 39% YoY. Inflow (-8%) and execution (+1.4%) were disappointing," CLSA said. 

The report added, "L&T’s cleaning up of its backlog in 2Q and 8% decline in 3Q inflow led to a slowed order book (+1.4% YoY). On the call, management said it has lowest bids plus likely pipeline wins of $10 billion but the government decisions are taking time."