Buy Larsen & Toubro; target of Rs 4160: Sharekhan

BUY

Sharekhan's research report on Larsen & Toubro

Healthy consolidated revenue growth of 15% y-o-y was aided by core P&M business with stable OPMs at 10.2%. International order inflows and revenues rose by 18% y-o-y and 38% y-o-y. L&T retained order inflow growth guidance of 10% y-o-y, revenue growth of 15% y-o-y and an 8-8.25% OPM for core P&M business for FY2025. Company has healthy order prospects of ~Rs. 9.07 lakh crore, although lower from start of fiscal year due to fall in hydrocarbon prospects. Order book at an all-time high of ~Rs 4.91 lakh crore (2.1x TTM revenues).

Outlook

We maintain a Buy with a revised PT of Rs. Rs. 4,160, factoring upwardly revised valuation of L&T Mindtree and L&T Finance and considering strong order prospects.

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