Buy L&T; target of Rs 1855: Angel

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26 Aug, 2025 12:21

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Angel Broking's report on Larsen and Toubro (L&T)

For 3QFY2015, Larsen & Toubro (L&T) reported a subdued 4.2% yoy growth in the standalone top-line to Rs 14,995cr, owing to lower revenue booking across Power, Metallurgical & Material Handling (MMH) and Heavy Engineering (HE) segments. The EBITDA margin for the quarter came in lower than our expectation at 10.5%, down 127bp yoy as margins declined across all business segments (exc. Power, E&A & Other’s segment). The Reported PAT declined 14.6% yoy to Rs 1,060cr, owing to higher depreciation and interest expenses.

The consolidated order inflow in 3QFY2015 amounted to Rs 34,600cr, increasing by 19.3% yoy, thus taking the total consolidated order inflows for 9MFY2015 to Rs 1,07,800cr (up 15.9% yoy). L&T’s order backlog currently stands at Rs 2,25,800cr, indicating a 17% yoy growth. The current order book gives revenue visibility for over the next 24 months.

Outlook and valuation: "Considering the robust order backlog, healthy order inflows, and strong execution capabilities, we are of the view that L&T is well positioned to achieve its FY2015E consol. revenue guidance of 10-15% (lower end). Losses from the Hydro-carbons business could dent 4QFY2015 margins. However, L&T is well positioned to benefit from an expected gradual recovery in the capex cycle, given its diverse exposure to sectors and strong balance sheet. We maintain our Buy rating on the stock with a target price of Rs 1,855", says Angel Broking research report.

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