Larsen & Toubro Ltd. share price target

Key highlights: Revenues at Rs 219bn (+9% yoy) were led by a pick up in execution in its powersegment.Itsinfrastructuresegment(42%ofsales)revenuesgrew9%yoyona20% yoyincreaseininternationalrevenues,evenasdomesticsalesforthesegmentgrewby4%....

1QFY17 performance below expectations: Larsen & Toubro's (L&T;) 1QFY17 consolidated performance was substantially below expectations. Revenues of INR219b (+9% YoY) were in line with our estimates of INR223b. EBITDA at INR19b (+16.1% YoY) was meaningfully below our estimate of INR24b, driven by provisions under Ind-AS, write-down in the shipbuilding division and close out costs incurred in the hydrocarbon segment. However, adjusted for the same, reported EBITDA was in line with our estimates. Reported PAT at INR6.1b was below our estimate of INR8.1b....

Focus shifts to order inflows, execution and working capital:Key focus areas for FY17 are order inflows, domestic execution and working capital improvement; asset divestments to aid improvement in ROE."Lakshya"- five-year (FY17-21) strategic plan aims to double sales, improve margins, and increase ROE to 18% from the current level of 12%. Motilal Oswal maintain our BUY rating with a revised target price of INR1,770 (earlier INR1,480) 22x standalone EPS, to which they add INR450 for the subsidiaries.

Trendlyne has 17 reports on LT updated in the last year from 6 brokers with an average target of Rs 1553.4. Brokers have a rating for LT with 3 price upgrades,2 price downgrades,1 downgrade in past 6 months and 4 price downgrades in past 1 Year.

The objects of the Offer are to achieve the benefits of listing the Equity Shares on the Stock Exchanges and to carry out the sale of up to 17,500,000 Equity Shares by the Selling Shareholder. The listing of the Equity Shares will enhance...

L&T will transition to new accounting standards (IND?AS) from 1QFY17. The company held an analyst call to discuss the impact on its consolidated financials. Even though L&T’s financial subsidiaries are not required to move to the new standards in 1QFY17, for consolidation, L&T will report financials of these subsidiaries as per IND?AS. Other than the impact of reclassification of major subsidiaries as JVs and Expected Credit Loss (ECL), there should not be any material change to L&T’s recurring earnings.The new standards have no material impact on earnings, as most of the initial impact would be routed through the balance sheet. As this does not change their view of the business, Phillip Capital maintain our Neutral rating and SOTP?based target price of Rs 1420.

Trendlyne has 16 reports on Larsen & Toubro Limited - LT updated in the last year from 5 brokers with an average target of Rs 1499.3. Brokers have a rating for LT with 1 downgrade,2 price downgrades and 3 price upgrades in past 6 months,4 price downgrades in past 12 months.

Standalone numbers impress: For 4QFY2016, Larsen & Toubro (L&T;) reported an 11% yoy increase in the top-line to Rs21,061cr, which is slightly lower than our expectation. Revenue growth on a yoy basis reflects an 11.7%/ 33.3% increase in Infrastructure/ Power segment. EBITDA for the quarter came in higher than our expectation at Rs..

9 Pickup in the pace of execution in its infrastructure segment (55% of consolidated sales)coupledwitha320bpssegmentmarginexpansionledtothepositivesurprise. Q4 order inflows (Rs 433bn; 9% yoy) were lower than our estimates of Rs 495bn;...

ICICI Securities Ltd | Retail Equity Research Standalone revenues grew 11% YoY to | 21061 crore (I-direct estimate: | 20478 crore) and were above our estimates....

Standalone numbers disappoint: For 3QFY2016, Larsen & Toubro (L&T;) reported 1.5% yoy decrease in its top-line to Rs14,774cr, reflecting revenue de-growth across Infrastructure and Others segments. The EBITDA margin for the quarter is down 368bp yoy to 6.8%, on account of surge in SAO and employee expenses. The PAT came in at Rs791cr, down 25.3% yoy, reflecting poor operational performance. Order inflows for the consolidated entity in 9MFY2016 declined 13.2% yoy to Rs93,524cr. The order backlog stands at Rs2,56,458cr, thereby giving revenue visibility for over the next 10 quarters. Hydro-carbon reports minimal losses: Despite completion of legacy projects in the international business, strong execution of ongoing projects helped the Hydro-carbon segment report revenues of Rs2,184cr in 3QFY2016. For the quarter, this segment reported a turnaround in its EBIT to Rs39cr vs a loss of Rs137cr in 3QFY2015. On the whole, this segment ended 9MFY2016 with an EBIT level profit of Rs77cr. Key Positives: Surprise on the order inflow numbers for the quarter, turnaround in the Hydro-carbon segment; net WC cycle at 24% of sales. Key Negatives: Lowering of order inflow guidance for FY2016, revenue degrowth in 3QFY2016. Outlook and valuation: L&T;s diversified presence and an anticipated recovery in the capex...