Shares of Shares of Larsen & Toubro fell much below market's expectations. Know why

Shares of Larsen & Toubro Ltd. edged lower after India's top engineering and construction giant reported a fall in quarterly profit on the back of a paucity of orders from one of its main catchment areas. The earnings fell much below market's expectations.

Larsen said its first quarter consolidated net profit plunged 37 percent to 606 crore rupees compared with 967 crore rupees in the same quarter a year ago. Sales during April-June gained 6.7 percent to 20,252 crore rupees from 18,975 crore rupees during the year ago period.

A 21 percent year-on-year fall in new orders, lead by the Middle East segment was the key negative, according to global brokerage CLSA.

Larsen fell 1.2 percent, or 24 rupees, to 1,772 rupees on the National Stock Exchange, where 22.3 lakh shares were traded in the first hour of trade compared with the 5-day average of 16.8 lakhs.

HCL Tech's market capitalisation has risen 20 percent over the past one year to 1.63 lakh crore rupees as investors and traders latched on to hopes that the industrial cycle will revive, leading to strong order flow for L&T and its peers.

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