Moneycontrol Bureau Even after a dismal April-June quarter, L&T is on analysts' list. Its first quarter consolidated profit slumped 37.3 percent to Rs 606.2 crore compared to Rs 966.9 crore in the year-ago period. Consolidated revenue jumped 6.7 percent to Rs 20,252.2 crore from Rs 18,975.8 crore year-on-year.
So what makes analysts still interested in the stock?
CLSA maintains buy call with a target of Rs 2275 per share stating that the company is well positioned in domestic market to take advantage of the revivalin infrastructure investment and capex cycle. It expects earnings per share (EPS) CAGR of 26 percent over FY15-17 as a reduction in losses from subsidiaries and improvedexecution widen its margin.
"While a 15 percent growth in order inflows on a high base may bedifficult to achieve, especially given weakness in the Middle East, L&T may achieve sales and margin guidance," it says in a note.
After posting Q1 results, the company said it will maintain FY16 order growth guidance and FY16 guidance for order inflow and revenue remained unchanged at 15 percent.
Credit Suisse retains outperform rating. It is positive on execution pick-up from large backlog, large orders execution,weaker segments losing weight and margin support from operating leverage and commodities.
Macquaire also maintains outperform rating with a target price of Rs 2332 per share, hoping for strong execution and order inflow pick-up in second half of FY16. It sees an order inflow growth of only 12 percent in FY16.
JP Morgan feels quarterly result weakness in first half of FY16 provides a better entry opportunity in the stock. "L&T is likely to be a key beneficiary of uptick in government-funded infra capex, but with limited near-term stock upside and the risk of a second half leaning growth ask in FY16, a risk that appears shall become exacerbated further post September quarter results," it says in a note.At 13:32 hrs Larsen and Toubro was at Rs 1,768.00, down Rs 21.55, or 1.20 percent on the BSE.Follow @NasrinzStory
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