Prabhudas Lilladher's research report on Larsen and Toubro
L&T reported healthy set of numbers led by pick-up in execution in its core infra segment, owing to improved work force availability and supply chain issues normalizing. During 3Q, company recorded highest ever OI of Rs732bn, up 76% YoY led by large order wins in Infra and Hydrocarbon segment in the domestic market. OB stands strong at Rs3.3trn providing a strong revenue visibility for next 2-3 years. Management indicated that order pipeline stands healthy at ~Rs2.65trn with good traction witnessed in sectors such as Metros/RRTS/HSR, Roads and Expressways, Water, Renewables and Power T&D. On global front, business remains cautious on back of repeat outbreaks of Pandemic and resultant lockdown hampering the economy.
At CMP, the stock is currently trading at 30.3x/20.6x/18.4x FY21E/22E/23E. We roll over to FY23 estimates and maintain BUY with revised SOTP based TP of Rs1,526 (earlier Rs1,284). TP is revised upwards mainly due to recent rise in market capitalization of its holdings companies.