The board of directors of Larsen & Toubro (L&T) will discuss the cement demerger issue and the various alternatives available to the company when it meets tomorrow (Wednesday) to consider the second quarter results.
Sources close to the L&T top management said the board may or may not take a final call on the demerger issue on Wednesday. Senior L&T officials had earlier indicated that its board would take a final decision by October.
L&T has been in talks with three international cement majors, including Holcim, Lafarge and Cemex, for divesting 37.5 per cent equity stake in its cement division and retaining an equal stake for itself.
But, with the suitors demanding management control, L&T has been forced to look at other alternatives to roping in a strategic partner.
While one of the options was the possibility of roping in private equity investors, L&T could also defer the demerger plan.
This was because improved cement realisation has improved the division's contribution to the bottomline, which for so long, had been a drag on net earnings, while the mainstay engineering business has suffered because of the industrial slowdown.
Meanwhile, analysts are expecting L&T net profit at around the Rs 40-45 crore (excluding sales tax benefits) for the July-September quarter, primarily on account of improved cement prices.
