L&T Q1 profit down 12.5 percent, misses estimates

MUMBAI (Reuters) - 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 percent 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 7.56 billion rupees from 8.64 billion rupees 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 9.5 billion rupees.

 

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 <005490.KS> last week scrapped plans to build two steel plants in India, underscoring the obstacles that large projects face in the country.

(Reporting by Sumeet Chatterjee; Editing by Ryan Woo)