Kotak Institutional keeps reduce rating L&T

Lokesh Garg, Kotak Institutional Equities keeps reduce rating on Larsen and Toubro (L&T).

Garg told CNBC-TV18, "In L&T the management change is a definite positive in the near term in the sense that it takes away uncertainty of a management change to at least three and half years to four years from now which essentially means that L&T gets that much more time to groom the people who are coming up from ranks, thus make them ready for responsibilities in that time frame."
He further added, "In terms of view on the stock we still have a reduced rating, that is basically constrain by two issues. One thing is our sense is that overall cycle in terms of investments particularly large projects still remain weak. Second issues as demonstrated in some of the recent bids for large projects such as NTPC bid for power equipment, number of people qualifying for dedicated freight corridor project still implies that there is tremendous amount of competition that persists in the sector which would check the kind of margins or the kind of returns that he could make out of it."