Buy Larsen & Toubro; target of Rs 1932: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Larsen & ToubroL&T stock has underperformed the Nifty and the Sensex over the last 3 months on weak order flow in 1QFY16, and continued negative sentiments in Q2FY16 coupled with fear of delayed execution in Middle East (Eg Riyadh Metro). We expect to see a downward revision in earnings and revenue and we also believe the same is already factored in the current price. We believe that a pick‐up in execution in H2FY16 will be the key trigger/driver for stock price in the near term. 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. We have trimmed our estimate by ~5% for FY16/17E to factor in weak inflow in H1 and likely cut in guidance. Re‐iterate ‘BUY’ with revised TP of Rs1932 (Previous ‐ Rs2,000).We expect consolidated earnings to grow at 21% CAGR. The stock is trading at core PE of 15.5.0x FY17E earnings. We have trimmed our estimate by ~5% for FY16/17E to factor in weak inflow in H1 and likely cut in guidance and revised TP to Rs 1932 (previous Rs 2000). 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’.For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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