Buy Larsen; target of Rs 1783: PLilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher`s research report on Larsen and Toubro“L&T has announced orders worth ~Rs300bn for the quarter against reported order inflow of Rs334bn in Q1FY15. Order flow announced in the current quarter has been dominated by domestic orders which constituted 74% of orders against 44% in Q1FY15. Infrastructure continued to dominate order inflow with ~46% share. Recent data on new project announcements published by CMIE indicates signs of revival. Investment aggregates for the quarter ended Sep 2014 indicates a sharp rise in announcement of new industrial and infrastructure projects, up 95% YoY at Rs2.17trn. The value of investments proposed was highest in the last nine quarters. The key sectors which saw new project announcements were Power, Transportation and Real estate. The trend, which is visible in L&T’s inflow, with domestic inflow showing signs of revival, is also in line with management commentary of expected pick‐up in domestic market from H2FY15. L&T has guided for order growth of 20% YoY for FY15 which looks quite achievable, given that H1FY15 is likely to see inflow growth of ~21%.” “The stock is trading at core PE of 15.3xFY16E earnings. L&T continues to be the best play in the Indian Infrastructure space, given its strong business model, diverse skill sets, strong execution capabilities and relatively healthy/large balance sheet. Maintain ‘BUY’,” says Prabhudas Lilladher research report.   

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