ICICI Direct is bullish on Larsen and Toubro has recommended buy rating on the stock with a target price of Rs 1680 in its research report dated May 13, 2019.
ICICI Direct's research report on Larsen and Toubro
L&T's standalone revenues for Q4FY19 grew 14.4% YoY to Rs 30822.4 crore (above our estimate of Rs 30702.9 crore). On a consolidated basis, revenues were up 10.5% to Rs 44934 crore YoY. On a standalone basis, infrastructure & heavy engineering segment revenues grew 15.4% to Rs 25837.4 crore and 86.8% to Rs 899 crore on a YoY basis, respectively. For Q4FY19, L&T registered strong order inflows of Rs 56538 crore at the group level, up 14% YoY while the order backlog was at Rs 293427 crore, up 12% YoY. Standalone EBITDA margins came in at 11.2%, down 160 bps owing to few infra project headwinds. Consolidated PAT came in at Rs 3916 crore, up 13% YoY. Net working capital improved 200 bps to 18% while RoE improved 120 bps to 15.3% YoY.
We value L&T on SoTP (with base business at 20x FY21E EPS) with a revised target price of Rs 1680 and maintain BUY on L&T.
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