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L&T’s scrip tanks 7.3% on results, market cap dips by Rs 11,165 cr

Shares of Larsen & Toubro slumped more than seven per cent on Wednesday, wiping-out Rs 11,164.82 crore from its market capitalisation, after the company's June quarter earnings failed to meet market expectations.

The engineering major's stock tanked 7.32 per cent to settle at Rs 1,524.40 on the Bombay Stock Exchange (BSE). During the day, it lost 7.98 per cent to Rs 1,513.45.

At the NSE, Larsen's scrip plummeted 7.01 per cent to Rs 1,526.10. Following the dip in the stock, the company's market value plunged Rs 11,164.82 crore to Rs 1,41,420.18 crore. The stock was the worst performer among the bluechips on both Sensex and Nifty.

‘The key negative surprise came in from the hydrocarbon segment (49 per cent revenue de-growth and negative 60 per cent contribution margins),’ ICICI Securities said in a report. Larsen and Toubro (L&T) had on Monday reported over two-fold increase in the consolidated net profit at Rs 966.89 crore for the April-June quarter, mainly on the back of gain on disinvestments and stake sale in one of its projects.

The company had reported a net profit of Rs 458.59 crore in the corresponding quarter of last fiscal. Its revenues for the quarter under review increased 10 per cent to Rs 18,974.75 crore from Rs 17,241.14 crore in the year-ago period.

‘The two-fold increase in PAT is a due to an expectational gain of Rs 249.28 crore on divestment of strategic investment in City Union Bank and stake sale in L&T Finance Holdings, which was listed in 2011.

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