This largest infrastructure company’s shares gained prominence this week after UBS revised its ‘buy’ rating to an upside of 21 percent based on Wednesday’s close price of Rs 2,971 per share.
At 10:46 a.m. on Friday, Larsen & Toubro Ltd shares were trading at Rs 3,014.65, up Rs 5.20 or 0.17 percent from the previous close on the National Stock Exchange.
Larsen & Toubro is an Indian multinational company that specialises in EPC projects, high-tech manufacturing, and services. It has a global presence in over 50 countries.
The company’s share has delivered returns of 40 percent in six months and 66 percent in a year.
The company’s revenue has increased by 34 percent yearly, from Rs 35,853 crore in Q1FY23 to Rs 47,882 crore in Q1FY2. During the same period,, the company’s net profit climbed by 36 percent, from Rs 2,293 crore to Rs 3,116 crore.
The Company’s return on equity increased from 10.52 percent in FY22 to 11.72 percent in FY23, while the return on capital employed rose from 10.91 percent to 11.99 percent during the same period.
Based on an optimistic outlook on Larsen & Toubro Ltd.UBS has revised its target price to Rs 3,600, representing a 21% increase from Wednesday’s close price.
The rationale behind providing such a recommendation is
● UBS stated that the company’s new strategy ensures its appetite for consistent new order growth. And implementation of new strategies ensures the company expands opportunities from the overseas market. In addition, in the June quarter, L&T’s order book came from the Middle East.
● The brokerage expects L&T to record a compounded annual growth rate (CAGR) of 17 percent and 32 percent in core sales and Earnings per Share respectively over the financial year 2023-2026.
● In comparison to its competitors, L&T is a stronger option due to cyclical earnings momentum and better capital allocation, according to UBS research.
According to the company’s exchange filing, L&T Construction Heavy Civil Infrastructure business vertical won a mega order from the Mumbai Metropolitan Region Development Authority (MMRDA) on September 29 for the design and
construction of an Underground Road tunnel Project between Orange Gate, Eastern Freeway, and Marine Drive Coastal Road in Mumbai.
Written by Omkar Chitnis
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