L&T cuts orderbook outlook by half on demand weakness

NEW DELHI (Reuters) - Industrial group Larsen & Toubro Ltd on Friday halved the outlook for its orderbook growth amid continued weakness in its home market, casting a shadow over hopes of a pick-up in economic activity.

The conglomerate, viewed as a bellwether of Asia's third-largest economy, expects its orderbook to grow between 5 and 7 percent this fiscal year to March, Chief Financial Officer R. Shankar Raman said.

Larsen, a $15 billion group with interests in engineering, construction and logistics, earlier this year predicted the growth to be at 15 percent.

The cut in guidance sent its shares down more than 4 percent in a Mumbai market <.NSEI> that was trading 0.6 percent lower.

Larsen reported a 15.5 percent increase in its fiscal second-quarter net profit to 9.96 billion rupees ($153 million), up from 8.61 billion rupees a year earlier, as it generated more revenue from its infrastructure and power units.

Analysts had forecast a consolidated net profit of 10.03 billion rupees, Thomson Reuters data shows. (http://bit.ly/1kXQcVY)

"Slowing global economies, depressed commodity prices, weakening currencies and capital outflows are constraining the growth prospects of emerging economies," Larsen said in a statement, after releasing its second-quarter results.

"The ground level inputs indicate that it may take further time for significant pick-up in business opportunities."

A.M. Naik, chairman of Larsen, last month told Reuters he sees little sign of an economic recovery in India, with some of his factories running far below capacity and facing a dearth of new orders.

After disappointing investors in recent quarters with worse-than-expected revenue growth amid a slowdown in orders among its local private-sector customers, it has pledged to sell some assets and simplify its structure to boost returns.

($1 = 65.1700 rupees)

(Reporting by Tommy Wilkes; Editing by Sumeet Chatterjee and Sunil Nair)