Yesterday L&T slumped as much as 7.2% which made short time investors uneasy.

In fact we bought L&T at around 900+ in the beginning of the year and now investors want to know if the up move is over in it! Let us first check the reasons for the downfall of L&T!

On Monday, after the market hours L&T declared its Q1 results. The company's PAT jumped 111% to Rs 967 crore on 10% growth in gross revenue to Rs 19123 crore in Q1 June 2014 over Q1 June 2013. The sharp rise in PAT was on the back of divestment gains, L&T said. The recurring PAT jumped 68% to Rs 771 crore in Q1 June 2014 over Q1 June 2013. The growth in PAT, however, was restricted by a onetime loss of about Rs 942.14 crore at PBIT level from the hydrocarbon segment.  L&T said that the domestic market holds large potential, awaiting impetus through policy measures and conducive investment environment. The company expects good prospects in the medium term from revival of core sectors such as infrastructure, power, minerals & metals, defence and oil & gas when the initiatives by the new government at the centre take definitive shape and rigour. The company is confident of sustaining its growth momentum by utilizing the emerging opportunities for which it has positioned itself well, L&T said.

We believe that the stock may go down further but at lower levels say around 5-10% lower from the current level we expect the stock to consolidate and move up. It may be a good opportunity for the long term investors to buy at declines but surely it may disappoint in the short to medium run.

The market has jumped on account of several good results. This week more than 500 companies are declaring their results. But today  the market will be impacted by the F&O expiry and today the Nifty could swing either way.