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BW Businessworld

Larsen And Toubro Q1 Profit Down 12.5%, Misses Estimates

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Larsen & Toubro Ltd (L&T), India's biggest engineering and construction group, posted a surprise drop in its fiscal first-quarter net profit as a weak domestic economy hit spending on infrastructure projects.

L&T shares fell sharply after the company said earnings slumped 12.5 per cent in the June quarter from a year earlier. The stock was trading down 6.87 percent in a firm Mumbai market as of 2.24 p.m.

Net profit fell to Rs 756 crore from Rs 864 crore a year earlier, said L&T, which builds roads and develops real estate.

Analysts expected L&T, which also makes equipment for power plants and constructs ships, to post a net profit of Rs 950 crore.

L&T has been looking to boost its overseas sales as the soft Indian economy, growing at its slowest pace in a decade, hit infrastructure building in Asia's third-largest economy.

ArcelorMittal SA, the world's top steelmaker, and South Korea's POSCO last week scrapped plans to build two steel plants in India, underscoring the obstacles that large projects face in the country.