L&T, Power Grid, NTPC see further re-rating prospects - Jefferies
Larsen & Toubro, NTPC , Power Grid share prices have risen 68-93% in last one year. These capital goods/industrials and utilities majors have been benefitting from strong economic growth in the country. The power demand in the country also has been rising steadily.
With strong run up in share prices though the valuations are likely to have risen too but analysts as those at Jefferies India Pvt ltd see more upside to these stocks. Strong re-rating prospects for L&T In their report analysts at Jefferies highlighted that their valuation analysis points to further re-rating upside for L&T. As per Jefferies, in the last one to two years, the majority of industrial equities have beaten the Nifty.
From April 2006 to April 2008, L&T traded at an average premium of 90% above Nifty while at present, it is trading at a 70% premium. L&T thereby might further rerate by 11% from its present levels in this situation. Jefferies remains positive on L&T where core margin delivery is needed for further rerating.
Also Read- Buy or sell: Vaishali Parekh recommends three stocks to buy today — March 12 Siemens, Thermax, ABB, KEI are our top picks of Jefferies in the industrials space. Siemens and ABB India Ltd also have seen up to 79% in their share prices during last one year. However Siemens as per Jefferies now is trading at a premium of 185% to Nifty compared to 187% during the April 2006 to April 2008 period , and thereby Jefferies now sees limited upside.
Similarly for ABB, at 216%, ABB is trading far above the average of 123% for April 06–08. But after the sale of the power grids section in 2018–2019, ABB has undergone changes. ABB's business model has changed and the business now focuses only on automation, with some exposure to
. Read more on livemint.com
