Larsen & Toubro Ltd. share price target

Larsen & Toubro's (L&T;) adj. PAT grew 56% YoY and was 5% ahead of our estimate. Core E&C; EBITDA grew 18% YoY and was 17% above our estimate, led by margin expansion in the Infrastructure segment. Management has maintained its revenue guidance of ~15%, order inflow guidance of 10-15%, and a stable core E&C; margin on a YoY basis. International prospects are looking robust across segments, including hydrocarbon, power T&D;, water, etc., thanks to higher oil prices. Domestic E&C; order inflows were disappointing with 1HFY22 order inflows remaining...

L&T; remains best story to play capex upcycle: L&T;'s core E&C; business remains best placed to benefit from any capex upcycle, supported by its leaner asset-light business model and diversified segments. Therefore, although the Buildings and Power segments were weaker in FY21, this was largely offset by strong orders from the international Power T&D; and Hydrocarbons segments. L&T;'s capability to win large ticket size projects, such as airports and high-speed rail (HSR), has been remarkable and has compensated for its exit from the Roads sector....

Topline grows on robust order book and execution progress Revenue for Q1FY22 rose 38.0% YoY to Rs. 29,335cr (-39.0% QoQ), attributed to healthy project execution despite disrupted operations at various locations due to COVID-19. Order momentum impacted by subdued tendering and award activity resulted in sequential dip. Consolidated order book stood at Rs. 3.23tn as on 30th Jun 21, comprising of Infrastructure (76%) and Hydrocarbon (13%) orders. Infrastructure revenue grew 63.3% YoY to Rs. 10,453cr backed by solid execution. Additionally, Power (+101.2% YoY on large wins), Development Projects (+103.2%...

Consolidated net sales (including other operating income) of Larsen & Toubro for the quarter ended June 2021 has increased 38% to Rs 29334.73 crore. Despite challenging times with second wave of Covid and local lockdown affecting operations at many locations the higher revenue was largely attributed to healthy execution. Project progress was impacted with...

Larsen & Toubro (L&T;)'s adj. PAT came in at INR11.7b, missing our estimates by 19%. However, the miss in core E&C; EBITDA was lower at ~6%. The larger miss was reported on account of lower other income and higher tax rates, which is recoverable over the remainder of the year. Also, given that 1Q earnings typically contribute <15% to FY earnings, we refrain from reading too much into the current quarter's headline numbers. Notably, the company has maintained its full-year guidance for low to mid-teen growth...

L&T; Q4 Results, PAT rises 3% YoY to Rs 3,293 cr; Beats Estimates On Order Flow leading to 25% rise in operating profit to Rs6388.93 crore. Other income rose 56% to Rs 1028.26 crore. Provision for interest up 4% to Rs 853.07 crore. Provision for depreciation rose...

L&T;'s consolidated adjusted PAT grew 12% YoY to INR34.2b, 9% above our estimate. PAT in the Core E&C; segment grew 19% YoY to INR28.7b (12% ahead of our estimate). Margin surprise drove earnings beat. Balance Sheet improvement was a huge positive as net D/E (including minorities and adjusted for current investments) improved to 1x from 1.5x in FY20. This was driven by: a) completion of the sale of the E&A; business, b) working capital cycle improvement to 22.3% of sales from 23.7%. FY21 brought out the core strengths of the L&T;'s re-aligned business model as a...

Cash balance improved to ~Rs1.6trn in FY21 from ~Rs1.5trn in FY20, owing to rise in customer collection and government initiatives. L&T; reported steady quarter led by ramp up in execution across all business verticals. Margins were higher due to change in job mix, better operational efficiencies and several projects reaching margin threshold. Despite pandemic, OI came in at ~Rs1.8trn owing picking up in awarding activity in...

Larsen & Toubro (LT) has faced multiple challenges like slow growth, margin pressure, expanded working capital, high debt and low RoE in the recent past.