India’s Larsen and Toubro (L&T) reported third-quarter profit Tuesday that was below expectations, as higher costs countered sustained demand for infrastructure.
The company’s consolidated net profit rose 15% to Rs 2,947 crore ($355 million) for the quarter ended December 31, but fell short of analyst estimates of Rs 3,304 crore, according to LSEG data.
Due to the variety and size of orders in the portfolio, L&T’s performance is often seen as a gauge of capital expenditure in the Indian economy.
Total expenses for the quarter rose over 19% to Rs 51,194 crore, overshadowing an 18.8% rise in operating revenue – the slowest revenue growth in the last two quarters.
An optimistic environment for capital expenditure, aided by the government’s spending hike ahead of this year’s assembly polls, had benefited Indian construction companies.
However, analysts say enthusiasm for capital investment is waning as the election approaches, with slowed procurement activity and fewer project announcements.
The company’s shares closed 2% lower ahead of the results.
First print: January 30, 2024 | 6:47 PM IST