Larsen & Toubro (L&T, which is in eleven stock screeners) has had analysts taking another look at the stock as the company's new project announcements have slowed in recent months. Analysts are increasingly expecting new project announcements to come in mostly in the next financial year. Deustche Bank research has maintained its buy call on the stock but cut its price target; its buy target now stands at Rs. 1,620 per share, down from Rs. 1,650.
Upcoming central government elections may see funds diverted into farm loan waivers and big agri giveaways, with large infrastructure projects de-prioritized. These risks are the highest for L&T in the lead-up to elections. Wavering appeal for the BJP, visible in recent state elections, may also impact project outlook in the next financial year. A new set of political parties elected in the next election could result in a relatively slow-moving coalition, or a government less focused on infrastructure development.
Analysts however remain largely optimistic on L&T's prospects, with the average broker target on Trendlyne above current price and approximately Rs. 1,530. L&T management expects revenue growth in FY19 to be better than the 16.7% YoY growth in FY18; it expects industry growth to do well into the next financil year.
L&T's technicals are mid-range currently and the company has seen modest share price gains in one month despite stock market volatility (+3.03% increase in share price).