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L&T drags market lower
Mon, 22 Jul Closing

Indian equity markets opened the day on a positive note but pared most of their earlier gains and traded flat in the late afternoon session after Larsen & Toubro, country's biggest engineering and construction major, said its net profit dropped 12% as global slowdown impacted order flows. While the BSE-Sensex closed higher by 9 points, the NSE-Nifty closed higher by 3 points. Both the BSE Mid Cap and the BSE Small Cap closed on a positive note. Banking and Auto stocks were the biggest gainers.

As regards global markets, Asian indices closed in the green. European indices have also opened in the green. The rupee was trading at Rs 59.58 to the dollar at the time of writing.

Hindustan Zinc announced its June quarter results. Topline grew by 8.6% YoY during the quarter, due to higher mined metal production which increased by over 27%. Operating margins declined by 1.2% with operating profits going up by 5.9% YoY. Bottomline grows by 5% YoY as the impact of higher sales and output was partially offset by lower metal prices. Net profit margins declined by 2% YoY.

Larsen and Toubro (L&T) has announced its first quarter results for FY14. Net sales on a standalone basis grew by just 5% YoY. The sales growth was impacted by poor performance of power and Metallurgical and Material Handling segments. Operating profit declined by 1.2% YoY as total expenses increased by 5.6% YoY. Operating margin, therefore decreased by 0.5% to 8.5% YoY in 1QFY14. Net profit of the company declined by 12.5% YoY. Decline in net profit was a result of poor operating performance, decline in other income and a slight increase in tax rate. The company received fresh orders worth Rs 251.6 bn during the quarter, recording a healthy growth of 28% YoY. Order backlog of the company increased by 8% YoY to Rs 1653.9 bn. The stock closed down by 7%.

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