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Buy Larsen and Toubro; target of Rs 2075: Sharekhan

Sharekhan is bullish on Larsen and Toubro has recommended buy rating on the stock with a target price of Rs 2075 in its research report dated July 26, 2022.

July 28, 2022 / 08:42 PM IST
Rama Steel Tubes: Nomura Singapore buys 1 lakh shares in Rama Steel Tubes. Nomura Singapore bought 1 lakh equity shares in the company via open market transactions on June 15. These shares were acquired at an average price of Rs 371 per share.

Rama Steel Tubes: Nomura Singapore buys 1 lakh shares in Rama Steel Tubes. Nomura Singapore bought 1 lakh equity shares in the company via open market transactions on June 15. These shares were acquired at an average price of Rs 371 per share.

 
 
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Sharekhan's research report on Larsen and Toubro


Q1FY2023 numbers were broadly in line with our expectations. Order inflows improved significantly by 57% y-o-y led by strong intake across verticals including international orders (43% of total inflows), while order prospects for FY2023 stand at Rs 7.6 trillion. Maintained order intake and revenue growth guidance of 12-15% for FY23E, OPM in projects business to be at 9.5% and the company expects to bring down working capital to ~20% of sales for FY23E. Pick-up in infrastructure spend by the government and incentivizing domestic manufacturing bodes well for growth. Further, private capex likely to pick up in H2FY23. Middle East region’s hydrocarbon and infrastructure capex spends too have increased due to a rise in crude oil prices.



Outlook


We maintain a Buy on L&T with a revised PT of Rs. 2,075, factoring in increase in valuation multiple for the core business given robust order book of Rs 3.6 lakh crore (2.2xTTM revenue) and a promising long-term outlook.

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Larsen & Toubro - 270722 - khan

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first published: Jul 28, 2022 08:42 pm
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