Larsen & Toubro Ltd. share price target

Given attractive valuation and upside potential post recent correction, we reiterate our BUY rating on the stock, with a revised target price of Rs. 1,120 based on SOTP valuation. LTI & Mindtree led topline growth Company reported Q4FY20 revenue of Rs. 44,245cr (+2,2% YoY), driven by growth from IT Services (+68.8% YoY, led by LTI, LTTS, and Mindtree), Hydrocarbon (+15.1%, driven by execution of large opening order book) and Financial Services segment (+5.8%). This was partially offset by weaker revenue from Infrastructure (-5.7% YoY),...

Larsen & Toubro the engineering construction to software major has registered 2% growth in consolidated revenue to Rs 44245.28 crore for the quarter ended Mar 2020. However with 60 bps contraction in operating profit margin to 11.6%, the operating profit was down by 3% to Rs 5121.04 crore. As other income stand higher by 8% to RS 660.48 crore, the fall at PBIDT was restricted at 2% to Rs 5781.52 crore. But with interest and depreciation stand higher, the PBT...

7 June 2020 4QFY20 core operating performance was below expectation as E&C; EBITDA missed our expectation by 16%. Higher other income and lower taxation cushioned the impact, limiting consolidated adj. While macro variables may not be controllable for management, navigated these challenges multiple times in the past, and the core E&C; business remains cash generating. Factoring the macro risks, we cut our core E&C; EPS by 1618% over FY21 22E. The consolidated EPS cut is limited to 11%/13% in FY21/FY22E as the IT businesses (LTI, LTTS, and Mindtree) provide some support. PAT CAGR at 7%/7%/2% as tax rates While the near-term outlook may look hazy, L&T; remains the best proxy of the Indian capex story and is likely to further consolidate its market share in the post-COVID-19 era. A disappointing operating performance was offset by higher other income (+8% on high base), a lower tax rate (22.

due to uncertainties, however it is banking on new orders in heavy civil, water & power TD from States & Central govt, backedbyfundingfrommultilateralagencies. Though8090%ofL&T;'ssitesareoperationalcurrently,labour squeeze at projects sites (~40% availability) poses execution challengesinH1FY21.Itexpectsthingstonormalizein30days. WhileL&T;willfaceneartermheadwindsonnewordersand execution,wethinklongtermoutlookremainsstrongledby,i)...

Q4 execution was impacted by the pandemic but decent order flows of Rs577bn(5% yoy) helped it end FY20 inflows with a 9% yoy growth vs the guided range of 10-12% and 12-15% respectively. WC, at 23.7%...

Larsen and Toubro (L&T;) reported steady performance in Q4FY2020 despite challenges. The company's performance was in line with our estimates. L&T;'s revenue stood at Rs. 44,245 crore, up 2.2% y-o-y (in line with our estimate). L&T;'s ex-services revenue, which comprises 77% of total revenue, declined by 5% y-o-y to Rs. 33,941 crore, as revenue across segments declined y-o-y, barring hydrocarbons (up 15% y-o-y). Infrastructure (75% of ex-service revenue) declined by 6% y-o-y on account of slow-moving orders, stoppage of A.P. jobs, funding constraints, and COVID-19 impact. The company lost Rs. 1,750 crore revenue, Rs. 400 crore PAT, and Rs. 1,500 crore...

28-30% in 2HFY20 versus 37-38% in 1HFY20 mainly on account of marketing expense and increase in MR count. We have increased our earnings estimates for FY21E and FY22E by 6% post encouraging growth in top-10 brands, better gross margin (85%) in Q4FY20 and management guidance. Maintaining PE 21x of FY22E earnings, our new TP is Rs576 (previous Rs547) and we also change our rating to Accumulate' (earlier BUY) due to recent rally in stock price. Performance better than expected: Revenue/EBITDA grew 16% and 24% YoY...

~37% of customers opted for moratorium. See no challenges in financing. TVSL's reported mixed set of results where revenues came in-line at Rs34.8bn (-21% YoY). Despite dealer incentives worth Rs0.2bn (net off from revenues), realization came in at Rs55k/unit (PLe Rs54k/unit). Led by tight cost control, EBITDA came in higher at Rs2.5bn (PLe Rs2.3bn, -20.5% YoY)...

costs and near normal small town delivery sales are positive, we see near term headwinds from 1) closure of 30% stores with opening unlikely before Mid June 2) loss of dine in sales due to social distancing 3) lower store...

The big disappointments have come from (a) water segment, down 33% to USD2.5b, (b) buildings and factories, down 43% to USD2.3b (base had good order inflows from airports), and (c) heavy civil International order inflows in core E&C; have been quite strong in 9MFY20 to ~INR280b (+29%), on top of 30%+ growth witnessed in FY19. We note that execution rate in international orders are higher than domestic orders, especially given the strong inflows in the hydrocarbon segment. The phase includes the The contract won by L&T; Hydrocarbon is for the engineering, procurement, construction and commissioning (EPCC) of three Central Processing (CPF) facilities for the South West Gas project, located in the Adrar province.