Larsen & Toubro (L&T) share price rose more than 4 percent and was the top gainer in intraday trade on August 27 as the broking house Motilal Oswal maintained a "buy" rating on the stock.
Motilal Oswal increased the target price to Rs 1,950, an upside of more than 22 percent.
L&T’s core E&C business remains best placed to benefit from any capex upcycle, supported by its leaner asset-light business model and diversified segments, the brokerage house said.
"If the macro improves, the strong FCF generation should enable L&T to hike dividend payouts as there is hardly any capex requirement beyond the maintenance capex," the broking firm said.
L&T’s capability to win large-ticket size projects, such as airports and high-speed rail (HSR), has been remarkable and compensated for its exit from the roads sector, it added.
The stock is the top pick in the wider capital goods sector as a proxy to play India’s capex story, said Motilal Oswal.
At 1226 hours, Larsen & Toubro was quoting at Rs 1,660.65, up Rs 65.40, or 4.10 percent, on the BSE.
The share touched a 52-week high of Rs 1,676.70 on August 16, 2021 and a 52-week low of Rs 842.50 on September 24, 2020. It is trading 0.96 percent below its 52-week high and 97.11 percent above its 52-week low.
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