Buy Larsen & Toubro, target price Rs 4,250: Motilal Oswal Financial Services
buy call on Larsen & Toubro with a target price of Rs 4,250. The current market price of Larsen & Toubro Ltd. is Rs 3576.25. Larsen & Toubro Ltd., incorporated in 1946, is a largecap company with a market cap of Rs 491945.68 crore, operating in the construction sector.
Larsen & Toubro, is a key products/revenue segments include income from construction work, income from manufacturing and trading activities, other services, other operating revenue, property development, commission, service (engineering) and lease rentals for the year ending 31-Mar-2024.
Financials For the quarter ended 30-06-2024, the company has reported a consolidated total income of Rs 56,040.46 crore, down -17.73% from last quarter's total income of Rs 68,120.42 crore and up 14.30% from last year same quarter's total income of Rs 49,027.93 crore. The company has reported net profit after tax of Rs 3440.11 Crore in latest quarter.
Investment Rationale
L&T has underperformed the broader capital goods index for the last six months on concerns related to weaker-than-expected domestic and international ordering. Despite muted ordering trends in FY25 so far, we see the following positive factors for L&T: 1) strong order book sustaining healthy revenue growth, 2) an expected revival of domestic order inflows after state elections, 3) bottoming-out of margins, 4) fairly stable working capital, and 5) attractive valuations of 23x FY26E EPS for the core EPC segment.
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