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Jul 26, 2012, 01.30 PM IST | Source: Moneycontrol.com

Buy Larsen & Toubro; target Rs 1551: Firstcall Research

Firstcall Research is bullish on Larsen & Toubro (L&T) and has recommended buy rating on the stock with a target price of Rs 1551 in its July 23, 2012 research report.

Firstcall Research is bullish on Larsen & Toubro (L&T) and has recommended buy rating on the stock with a target price of Rs 1551 in its July 23, 2012 research report.

"SYNOPSIS Larsen & Toubro (L&T) is a USD 12.8 billion technology, engineering & construction group with global operations. During the quarter, the revenue stood at Rs. 119553.50 mn recorded a rise of 26.08% over the corresponding quarter of the previous year. During the quarter, the company has secured Rs. 844.00 billion as total project costs. Larsen & Toubro Electrical & Automation acquires UK-Based Thalest Group". L&T Construction - part of the Larsen & Toubro conglomerate has bagged new orders valued Rs. 2410 crore across various businesses during the first quarter of 2012-2013. L&T IDPL emerged as the successful project bidder to develop two contiguous road projects of length 484 km 4 lane roads at a cost of approximately Rs. 4800 Crore. Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 11% over 2011 to 2014E respectively."

‘Larsen & Toubro is a USD 12.8 billion technology, engineering, construction, manufacturing and financial services conglomerate, with global operations. It is one of the largest and most respected companies in India’s private sector. The Company’s net profit jumps to Rs.8636.50 million against Rs.7461.50 million in the corresponding quarter ending of previous year, an increase of 15.75%. Revenue for the quarter rose 26.08% to Rs.119553.50 million from Rs.94826.10 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.14.10 a share during the quarter, registering 15.29% increase over previous year period. Profit before interest, depreciation and tax is Rs. 16544.90 millions as against Rs. 14226.50 millions in the corresponding period of the previous year."

"At the current market price of Rs.1373.00, the stock P/E ratio is at 17.21 x FY13E and 15.68 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 79.76 and Rs.87.58 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 16% and 11% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 9.97 x for FY13E and 9.06 x for FY14E. Price to Book Value of the stock is expected to be at 2.79 x and 2.37 x respectively for FY13E and FY14E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.1551.00 for Medium to Long term investment," says Firstcall Research report.

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