Larsen & Toubro shares gained 1.5 percent in morning on Thursday after global banking and asset management group Investec increased target price for the stock to Rs 1,745 from Rs 1,725 earlier, implying 24 percent potential upside.
While maintaining buy call on the stock, the research house said the performance of company's subsidiaries is consistently improving and debt of several subsidiaries replaced with equity in the last three years, which resulted that consolidated gross debt has stayed flattish since FY16.
Investec feels asset monetisation or share buyback can expand return ratios of the company and sees L&T as an excellent play on government capex pick-up.
The infrastructure and engineering major had reported a 23 percent year-on-year growth in net profit to Rs 2,230.49 crore for the September quarter and 21 percent YoY rise in revenue to Rs 32,080.83 crore.
The company had witnessed a strong growth of 46 percent, with order wins worth Rs 41,921 crore at the group level during the quarter ended September 2018 due to pick-up in domestic ordering activity.
L&T also maintained its FY19 revenue and order inflow guidance at 12-15 percent and 10-12 percent growth, respectively as the government expedites pending infrastructure projects and tenders new ones ahead of general elections next year.
At 10:10 hours IST, the stock was quoting at Rs 1,423.50, up Rs 19.90, or 1.42 percent on the BSE.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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