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L&T shares trade flat ahead of Q2 earnings

BusinessToday.In     October 28, 2020

Share price of Larsen & Toubro (L&T) traded flat on Wednesday as the company would announce September quarter earnings later in the day. The company is also going to consider a special dividend today.

"Given that at the meeting of the board of directors of the Company scheduled to be held on Wednesday, October 28, 2020, it is proposed to consider and approve special dividend on equity shares, for the Financial Year 2020-21," L&T said in an exchange filing.

Share price of L&T opened at day's high of Rs 994.85. Later, the stock fell to an intraday low of Rs 974.15 on BSE, falling 0.8% against the last closing of Rs 982.45. L&T stock has fallen after 8 days of consecutive gains.

Larsen & Toubro share is trading higher than 5, 20, 50 and 100 day but lower than 200-day moving averages. The stock price of L&T has fallen 1.5% in one week, 9.4% in one month and 30% since the beginning of the year.

Market capitalisation of the firm stood at Rs 1,37,285 crore as of today's closing session.

ICICI Securities said in its note, "In our view, working capital and cash flow situation will be key monitorable. Consequently, we expect adjusted standalone revenue (ex E&A as discontinued operations) to decline 19.5 per cent to Rs 15,102. Ebitda (earnings before interest, taxes, depreciation, and amortization) is expected to fall 22.2 per cent to Rs 1,208 crore with the margin down 30 bps to 8.0 per cent and adjusted profit after tax expected to decline 50.7 per cent to Rs 978 crore."

As per HDFC Securities, the engineering and construction major is expected to report 6% YoY decline in revenues at Rs 33,350 crore while its Adjusted PAT is expected to decline 44% YoY to Rs 1,430 crore. Company's EBITDA is expected to decline 17% YoY to Rs 3,320 crore and its EBITDA margin is expected to come around 10%.

Brokerage firm Kotak Institutional Equities said in its note that it sees reported profit growth at 373% YoY because it assumed electrical and automation unit sale proceeds of Rs 9,400 crore (post-tax) to be booked as extraordinary income during the quarter.

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