L&T opens down but recovers ahead of Q2 numbers

L&T, the infrastructure major, declined by 1% on opening on Friday morning ahead of its results. Analysts said that the September-quarter earnings numbers may disappoint due to pricing pressures.

 

The stock fell 1.1% to Rs 828 post the opening but recovered from the decline immediately. The share is currently up 0.5% to Rs 841.50. The stock on Thursday had closed at Rs 837.25 per share, down 3.7% from its previous close.

 

On Thursday, Credit Suisse downgraded the outlook for the stock from neutral to underperform. “Led by an increasing share of orders from low-margin Middle East and real estate segments, its margin pressure should continue. We expect L&T to cut its guidance of flat margins for the 2014 fiscal,” said analysts Amish Shah and Abhishek Bansal in the Credit Suisse client note dated October 15, 2013.

 

Sector analysts said that the stock had run up a bit in anticipation of its Q2 earnings numbers. Since September, the stock price of L&T has run up by over 15%. Some analysts said that there could be some profit booking in the stock post the result numbers.

 

The BSE Sensex on Friday went up 0.7% to trade at 20,563 while the NSE Nifty was trading up 0.6% to 6,082.