Motilal Oswal maintained a ‘Buy’ call on the Indian multinational conglomerate company, with an increased target price of ₹4,200 per share which is a 23% upside from the current market price of ₹3,400.
In Larsen & Toubro Ltd, the broker sees positive factors such as a strong international order book, particularly in Saudi Arabia, a growing hydrocarbon segment, effective risk management in foreign projects, and increased return on equity through working capital control.
Despite lower-than-expected margins, the broker expects a CAGR of 26% in profit over the next three years. The target price increase is calculated using a Sum of the Parts (SOTP) valuation.
Looking at their Q3 results the company’s net revenue has increased by 18.8% YoY from 46,390 crores to 55,128 crores and their net profit increased by 17.4% YoY from 3,058 crores to 3,593 crores.
The Company received orders worth ₹ 75,990 crore at the group level during the quarter ended December 31, 2023, registering a robust 25% YoY growth. International orders at ₹ 50,562 crore during the quarter comprised 67% of the total order inflow.
The consolidated order book is at ₹469,807 crore as of December 31, 2023, with international orders having a share of 39%.
Additionally, the Larsen & Toubro Limited approved the merger of L&T Energy Hydrocarbon Engineering Limited and L&T Sapura Offshore Private Limited, wholly owned subsidiaries, with the Company
Larsen &Toubro Limited approved an equity investment of up to 22,774 crores in L&T Metro Rail (Hyderabad) Limited (LTMRHL), a subsidiary of the Company. This would reduce the debt and interest burden of LTMRHL.
Despite a positive outcome, the Larsen & Toubro Ltd share price fell 0.97% at ₹3,446 per share from its previous close of ₹3479.75 on Thursday at 9.45 trading session. Due to lower-than-expected quarterly margins and profit.
Larsen & Toubro Ltd is a multinational conglomerate that provides engineering, procurement, and construction (EPC) solutions in key sectors including infrastructure, hydrocarbons, power, process industries, defense, information technology, and financial services in both domestic and international markets.
Written by Sriram KV
In Shorts – Motilal Oswal reaffirms ‘Buy’ for Larsen & Toubro, target price ₹4,200 which is a 23% upside from CMP. Strong international orders and a growing hydrocarbon segment
drive optimism. The company’s Revenue is up 18.8% YoY, and profit is up 17.4% YoY. However, the Share price declined 0.97% to ₹3,446 on lower-than-expected margins and profit.
Written by Sriram KV
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